Thursday, April 23, 2015 Merkel: Must prevent Greece running out of cash before deal

Thursday, April 23, 2015

Merkel: Must prevent Greece running out of cash before deal

German Chancellor Angela Merkel and Greek Prime Minister Alexis Tsipras go to shake hands after addressing a news conference at the Chancellery in Berlin March 23, 2015.

German Chancellor Angela Merkel has said everything must be done to prevent Greece running out of money before it reaches a cash-for-reform deal with its international creditors, amid heightened concern that Athens is nearing the brink.

Merkel, Europe's pre-eminent leader, was speaking after a meeting she called "constructive" with Greek Prime Minister Alexis Tsipras on the sidelines of a European Union summit in Brussels. She said they had agreed to keep the contents of their discussion confidential.

Asked how great the risk was of Athens running out of cash before any agreement was reached with its official lenders, she told a news conference: "Everything must be undertaken to prevent that."

Tsipras told reporters they had noted significant progress had been made in the negotiations and added: "We have covered a large part of the distance."

He said he was very optimistic and that they had moved closer to a deal on an economic reform programme that would unlock frozen bailout funds. A Greek official reported "convergence" with Merkel on some issues including a lower budget surplus target for Greece.

However, EU officials cautioned that wide differences remain over reforms of the labour market, pension system, taxation and public finances, and much work remained to produce a binding, detailed agreement.

Euro zone finance ministers meet in Riga on Friday to review progress -- or the lack of it -- in the slow-moving negotiations between Athens and its creditors. European Commission Vice-President Valdis Dombrovskis said there had been little progress and he was getting worried about Greece's financial position.

The Greek official said there was "convergence" that Greece would aim for a primary budget surplus - before debt service - of 1.2 to 1.5 percent of gross domestic product this year. That is far below the goals of 3 percent in 2015 and 4.5 percent in 2016 set in Greece's 2012 EU/IMF bailout programme.

The "convergence" also covered privatisations, of which he gave no details, and making Greece's general secretariat for revenues independent of the finance ministry, he said.

While Greece has pushed for a loose political agreement, Germany, its biggest creditor, has insisted it is up Athens to satisfy representatives of the European Commission, the International Monetary Fund and the European Central Bank first.