(Reuters) – Greece defied its international creditors on Thursday, refusing to cut pensions or ease layoffs to meet their demands, dimming prospects of progress next week toward securing desperately needed financial aid.
Despite efforts by European Commission President Jean-Claude Juncker to coax leftist Prime Minister Alexis Tsipras into moving on two key conditions for releasing EU/IMF bailout funds, the Greek government spokesman said lenders could not expect Athens to make all the concessions.
“There should not be an expectation on the part of institutions … that the government will back down on everything,” Gabriel Sakellaridis told a news conference. “When you negotiate, there should be mutual concessions.
“We won’t go beyond the limits of our red lines,” he said. “It’s clear that we cannot cut pensions.”
Athens is running out of cash but has dragged its feet on accepting unpopular reforms promised by a previous government. Negotiations have moved so slowly that the lenders have ruled out an agreement at next Monday’s meeting of euro zone finance ministers.
Sakellaridis said Greek wants the Eurogroup ministers to recognize progress toward an agreement in a joint statement on Monday, giving the European Central Bank leeway to let Athens sell more short-term debt to Greek banks.
That would ease the immediate funding crunch, helping the government make a 750 million euro payment to the International Monetary Fund on May 12 and pay wages and pensions later.
However, sources familiar with the deliberations said the ECB was highly unlikely to make such a move unless the euro zone ministers set out a very strong prospect of releasing the frozen bailout funds.