Greek Prime Minister optimistic about deal

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Returning to his usual optimistic view, Greek Prime Minister Alexis Tsipras claimed that talks in Brussels on the Greek debt crisis had been "constructive" and said that "an agreement is in sight".

Nevertheless, Tsipras also said that Greece had rejected some of the proposals put forward by its creditors. Even head of the Eurogroup of finance ministers, Jeroen Dijsselbloem and chief of the European Commission Jean-Claude Juncker termed the talks "very good".

However, there is still no agreement.

Greece had hoped to have an agreement and funds released to pay for a 300 million euro payment due to the International Monetary Fund(IMF) this Friday June 5. Prime Minister Tsipras promised that Greece would make the payment.

French President Francois Hollande also expressed optimism about a deal telling reporters “It is a matter of a few days or even hours from a possible settlement." Yet talks are set to resume in a few days with no deal as yet. By that time, Greece will be even shorter of cash and more desperate as it will have made the IMF payment. Labour Minister Panos Skouletis maintained that there was no more room for Greece to compromise further. However, it may be forced to do so as it runs out of means to pay the remainder of it debts and other obligations to the end of this month when the loan agreement runs out. A deal is needed to release the final funds from the loan.

Not everyone was optimistic, Deputy Shipping Minister, Thodoris Dritsas said that proposals by Juncker during the recent meetings fell "beneath expectations in every way". There may be strong opposition within the ruling Syriza party to any further concessions and even to those already granted. Many leftists are upset that the government refuses to discuss any Plan B that would develop policies to face a situation where no deal was possible. Alexis Mitropoulos, a senior official within Syriza said: "[Juncker] took on the dirty work and conveyed the most vulgar, most murderous, toughest plan when everyone hoped that the deal was closing. And that at a time when we were finally moving towards an agreement we all want because we rule out a rift leading to tragedy.”

One important issue, that of budget surpluses appears to be on the verge of being solved. Greece will be asked to target a budget surplus of 1 per cent this year and 2 per cent next. Greece has proposed a 0.8 per cent surplus this year and 1.5 per cent next.

The Greek government has so far resisted pension cuts demanded by creditors and also labor market reforms. Taxation issues also appear divisive. A deal still appears to be at least a number of days ahead. A deal must be reached by about the middle of June to allow time for it to pass through various legislatures.

Sources:
http://www.euronews.com/2015/06/02/eurogroup-head-dampens-greece-s-enthusiasm-over-debt-deal/
http://www.euronews.com/2015/06/02/greek-debt-crisis-no-room-for-more-compromises-says-athens-minister/
http://www.nytimes.com/2015/06/04/business/international/greek-debt-tsipras-juncker-imf-european-commission.html?_r=0

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