ATHENS (Reuters) - Greece is willing to make concessions to strike a deal with creditors as long as it is “economically viable”, but will not cut its existing pensions, a top Greek negotiator told Reuters on Wednesday.
The comments by Euclid Tsakalotos were the clearest sign since the collapse of talks at the weekend that Greece still has room to offer some ground to lenders despite its hardline rhetoric against their demands.
Athens could accept a deal only if it was sustainable and addressed debt, financing and investment issues, said Tsakalotos, the coordinator of the Greek negotiating team.
“If you have that, then the Greek government will sign the deal,” Tsakalotos said. “If it doesn’t have that kind of deal there is no point in signing onto something that you know is going to fail.”
The comments by Tsakalotos - who took a prominent role in the talks with European and IMF lenders in April after Finance Minister Yanis Varoufakis was sidelined - come amid growing fears that cash-strapped Greece is on track to a default at the end of the month that paves the way for a euro exit.
He dismissed talks of “Grexit” by European partners as a form of pressure in the talks but confirmed Athens did not have money as of now to pay a 1.6 billion euro payment due to the IMF on June 30 without a deal with creditors to unlock frozen aid.
“At the moment we haven’t got the money,” he said, adding that Athens was already “squeezing every last bit of drop of liquidity” to service debt so far.
“There is no financing, we haven’t got access to the markets, we haven’t got money that hasn’t been paid since the summer of 2014 so obviously we won’t be able to have the money to pay that.”
Keeping up Athens’ rhetoric against what it calls unreasonable demands by lenders, he attacked European and IMF lenders for failing to give ground and seeking the bulk of concessions from Athens.
“(Negotiations are) a give and take process, not a convergence on the other side’s initial position,” Tsakalotos said. “They’ve moved a bit on fiscal targets but in most areas, you would be hard pressed to put an A4 paper between what they said in February and what they now say in June. So that seems a bit odd.”
In particular, he ruled out any further cuts to pensions, a stance repeatedly stressed by Prime Minister Alexis Tsipras, whose radical leftist party stormed to power this year on a pledge to end austerity and raise living standards in Greece.
Long-term reforms could be made to Greece’s pensions system, but not cuts to pension payouts, which Athens says would hurt vulnerable people and make its economy and debt problem worse.
“Pension reform is not a red line for us,” said Tsakalotos. “It seems to us utterly reasonable that pension cuts should not be on the agenda; pension reform should be on the agenda.”
Creditors complain that many Greeks retire younger than in other European countries and Greece’s finances cannot be made stable without cuts to the bill.
Athens says that even if the system is reformed for the future, it is unreasonable to reduce payments to retirees now, when many have already suffered cuts and support entire families, with a quarter of Greeks unemployed.
Tsakalotos suggested Athens be offered debt relief in the form of having the European bailout fund - known as the European Stability Mechanism - take over Greek bonds held by the ECB - as one option that would not increase debt for Greece or its partners.
“There are lots of technical solutions on how that could be done,” he said. “If there is goodwill, I can think of 10-15 solutions right now of how that could be done. If there’s no political goodwill then for any solution I can think of a drawback.”
Asked how confident he was that a deal could be reached, Tsakalotos said: “I think that question is mostly for European partners now.” He said it was up to Europe to show it is willing to “learn from its mistakes” and whether it was willing to accept a government that is not in the mainstream.
Writing by Deepa Babington; Editing by Peter Graff