Little chance of Greece debt compromise

The government is Athens on Thursday refused to implement reforms called for by its lenders, such cutting pensions and easing layoffs. That had dulled chances for a possible deal at a eurozone meeting on Monday.

"There should not be an expectation on the part of institutions… that the government will back down on everything," Greek government spokesman Gabriel Sakellaridis (pictured above) told reporters, adding that negotiations also meant "mutual concessions."

What international creditors see as Greece's unwillingness to implement unpopular reforms, the Greek government regards as keeping the promises it made to the public when it took office on a platform of reworking the country's negotiations with lenders and austerity measures the previous government had agreed to.

Athens needed to immediately arrange nearly 750 million euros to pay back to the International Monetary Fund (IMF). While spokesman Sakellaridis told reporters that his country would meet all its financial obligations, there was speculation that the government would need to scrape reserves from state entities and local governments.

Sakellaridis also said his government wanted an agreement by Monday, which would give the European Central Bank (ECB) permission to sell a short-term debt to Athens, which could then pay the IMF and salaries and pensions to its people. The ECB on Wednesday raised the amount of emergency cash assistance and did not tighten controls for debt collaterals. The bank's stance could, however, change if no political solution is reached soon.

Signs of hope

Meanwhile, Greek Prime Minister Alexis Tsipras spoke with Russian President Vladimir Putin over the phone to confirm that Moscow would provide financing to Greek companies involved in a planned gas pipeline project. However, the money would probably not suffice to cover Greece's needs, Reuters news agency reported the German Finance Minister Wolfgang Schäuble as saying.

Greece Finance Minister Yanis Varoufakis, who was sidelined from the negotiations, said he understood the urgency and that a solution was being prepared. "I trust that an agreement will be in the offing in the next days, mostly weeks," the minister told participants at a business forum in Brussels.

He also said a Greek exit from the euro was "a forbidden thought in our minds" because it would lead to the collapse of entire single currency zone.

Varoufakis received some support from the French Finance Minister Michel Sapin, who said a compromise in the following days would be reached because it was "absolutely necessary." With Athens facing an overall debt of 180 percent of its gross domestic product, there was an increasing need to provide aid on a sustained basis.

"We have to look at support beyond the end of June," Sapin said, but the eurozone would not do so without Greece agreeing to change its way of functioning. "We can give more time to Greece. But to do that, they need to be sure that it is possible to have a real good program for reforms," the Associated Press reported Belgium's Foreign Minister Didier Reynders as saying.

mg/sms (AP, Reuters)