Greek PM Alexis Tsipras seeks party support for debt reforms

Greek prime minister Alexis Tsipras has called on his fractious Syriza party to rally behind the government as time runs critically short to unlock funding from international lenders and avert a debt default.

Tsipras made his plea as Greek negotiators pushed to narrow differences with the EU and IMF creditors over a cash-for-reform deal on which the country’s future in the euro largely depends.

The two sides were expected to continue talks late yesterday to try to reach a deal, in a sign that they were moving closer to a compromise despite fierce protestations about the inadequacy of the other side’s proposals. With the Brussels negotiations entering a decisive phase, European officials took a tough stand, expressing their frustration with Greek negotiating tactics and trying to impress on Athens the depth of the risks that it is running.

“We will do everything to keep Greece in the eurozone but our patience is running out,” Finnish finance minister Alexander Stubb said.

Jeroen Dijsselbloem, who chairs the Eurogroup of eurozone finance ministers, dampened any expectations that a new Greek proposal promising more reforms and austerity in return for funding might offer an easy route to a deal.

“I’ve heard a lot of optimism from the Greek side, and it’s an underestimation of the complexity of what’s being asked of them,” Dijsselbloem told the Dutch RTL Nieuws TV station.

German chancellor Angela Merkel, who is due to meet Tsipras today, along with French president François Hollande, has already stressed the urgent need for a settlement. Greece’s bailout programme with the EU and IMF expires at the end of this month, and Athens must make big debt repayments to the IMF by then that will probably be impossible without new funds from its creditors.

Tsipras issued his call for unity at a meeting of Syriza’s political committee, which represents the party’s factions ranging from pro-Europeans to hardline communists.

Tsipras has to win over not only the lenders but also leftist Syriza party members who resolutely oppose the punishing austerity terms the EU and IMF have insisted on in return for bailout funds.

The day began with a mood of optimism in Athens after the government announced it had sent the new proposal to Brussels, agreeing to raise Vat rates further and proposing higher budget surplus targets. The Greek stockmarket closed up 0.6% after rising over 2% earlier in the day on hopes a deal was near.

The chief spokesman for the European Commission said the EU executive was still studying the suggestions but some officials swiftly dismissed the proposal.

Reuters