Greece is seeking a “new contract” with the euro area on how to continue its bailout, as talks resume and both sides signal willingness to compromise, according to government officials taking part in the talks.
Greek Prime Minister Alexis Tsipras met his EU peers at a summit for the first time on Thursday and said afterwards he sees political will to agree on what happens after the current aid program expires this month. Greece’s goal remains a six-month bridge agreement that would lead to a new deal with euro-area authorities, he told reporters.
German Chancellor Angela Merkel urged Greece to move swiftly with its next request, which she portrayed as a follow-on to the current bailout program. She said her first meeting with Tsipras was “very friendly” and cited ability to compromise as one of Europe’s strengths.
Photo: Reuters
“I would like them to apply for the extension as soon as possible,” Merkel said at a news conference in Brussels. “And if the goal is to fulfill it by the end of February, then I’d like the intention to fulfill it to be announced soon.”
Behind-the-scenes negotiations resumed in Brussels hours after euro-area finance ministers failed to reach a joint conclusion. Greek negotiators and officials from its euro-area creditors planned to meet in Brussels yesterday to discuss the way ahead as they struggle to decide whether to call the arrangement an extension, a new program or a bridge deal, officials said.
Germany would not insist that all elements of Greece’s current aid program continue, two officials in Berlin said. As long as the program is prolonged, Germany would be open to talking about the size of Greece’s budget-surplus requirement and conditions to sell off government assets, they said.
Greece’s willingness to hold to more than two-thirds of its bailout promises shows that it is broadly prepared to stick to the program, the German officials said. Improving tax collection and fighting corruption would win German backing, and getting a deal would depend on Greece’s overall reform pledges.
Greece is prepared to commit to a primary budget surplus, as long as it is lower than the current 4 percent of GDP, according to Greek government officials. Tsipras’s coalition also might compromise on privatizations, one of the officials said. The officials asked not to be named because the deliberations are private and still in progress.
Greece wants “a new contract” in which “our commitments for primary fiscal balances will be included and continuation of reforms,” Tsipras told reporters after the EU summit. “This also obviously needs to include a technical solution for a writedown on the country’s debt, so the country has fiscal room to return to growth.”
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