Greece vows to pay debts as it awaits handout from international creditors
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Version 0 of 1. Greece has vowed to honour heavy debt repayments over the coming weeks but says it is counting on international creditors to release billions of euros in rescue funds before the end of the month as crisis talks between the two sides grind on. But as the European commission described discussions over the long weekend as constructive, albeit with more work to be done, one Greek minister criticised the International Monetary Fund’s “extreme” demands for austerity cuts. Greece’s creditors are demanding reforms in exchange for bailout money, but the government of the prime minister, Alexis Tsipras, recently elected on an anti-austerity ticket, has said it will resist significant changes to pensions or the labour market. Related: 100 days of solitude: Syriza struggles as Greeks once again stare into the abyss On Monday, the Greek labour minister, Panos Skourletis, singled out the IMF as “inflexible” and “extreme”, saying the creditor was demanding pension cuts and opposing a government plan to raise the minimum wage. “They are asking us to not touch anything [of the austerity measures] that have ruined Greek people’s lives in the last five years,” Skourletis told Mega TV. “The IMF is the most inflexible side … the most extreme voices of the Brussels group” of creditors, he said. “But there are also calmer voices.” Greece owes money to the Brussels Group – the IMF, European commission and European Central Bank (ECB) – following its two bailouts in 2010 and 2012. A further €7.2bn (£5.3bn) in bailout money is still to be paid out and fears are growing that without it Greece will default on its debts, potentially precipitating the country’s exit from the euro. The most pressing of its obligations are payments to the IMF totalling almost €1bn by 12 May. But Skourletis tried to sound a note of reassurance that payments would be met. “The country has chosen to pay its obligations and reach an agreement [with lenders]. We are trying to have the money,” he said. A Greek government spokesman, Gabriel Sakellaridis, said Athens intended to meet all its debt obligations but it needed fresh funds before the end of the month. “Liquidity is a pressing issue,” he said. “The Greek government is not waiting until the end of May for a liquidity injection. It expects this liquidity to be offered to the Greek economy as soon as possible.” The Greek deputy prime minister, Yannis Dragasakis, is to meet the ECB president, Mario Draghi, in Frankfurt on Tuesday, a day before the central bank’s weekly review of emergency lending to Greece’s banks. Eurozone finance ministers convene on 11 May, and negotiators have been in marathon talks to pave the way to an agreement that could be signed off at the meeting. Athens confirmed on Monday that its finance minister, Yanis Varoufakis, will represent Greece at those talks after reports last week that the outspoken economist had been sidelined when Greece’s negotiating team was reshuffled. A spokesman for the European commission sounded a cautiously optimistic note about the preparatory negotiations on Monday. “The Brussels group has been in session throughout the weekend and continues to be in session. Talks have been constructive but more work remains to be done. The next opportunity for finance ministers to take stock will be the eurogroup of 11 May,” Margaritis Schinas said. There was fresh evidence on Monday of the continued pressure on Greece’s economy as it struggles to avoid bankruptcy. A closely watched report on the eurozone’s manufacturers showed that most enjoyed continued growth in April, but that Greece and France bucked the trend with factories cutting jobs as production fell. Manufacturing growth across the currency zone eased off slightly in April from March’s 10-month high, according to the latest manufacturing purchasing managers’ index (PMI) poll by the financial information company Markit. Ireland and Spain led the continued expansion though the pace of growth slipped. Manufacturers also raised average selling prices for the first time since August 2014, news that will reassure policymakers at the ECB after launching a large-scale quantitative easing programme to head off deflation. The PMI report’s headline index slipped to 52.0 in April from 52.2 in March, its 22nd month above the 50 mark that separates growth from contraction. “The eurozone manufacturing sector continued to grow in April, but the dip in the rate of expansion will serve to check recent optimism that the ECB’s quantitative easing programme has bought a guaranteed ticket to recovery for the region,” Chris Williamson, the chief economist at Markit, said. “Warning lights are flashing, particularly brightly over France and Greece, both of which saw accelerating rates of decline at the start of the second quarter. Weaker rates of growth in Germany and Ireland are also cause for concern.” |