Greece wants to conclude its bailout review but cannot accept what it sees as irrational demands on labor reform or for extra austerity, Prime Minister Alexis Tsipras said on Wednesday, in his first speech to lawmakers after a cabinet reshuffle.
Negotiations between Greece and its official creditors – the European Union and the International Monetary Fund – hit a snag this week due to differences on fiscal targets, energy and labor reforms in the country, where one in four is unemployed.
“The Greek government is fully consistent with what was agreed and has proven it has the political will to conclude the second bailout review without meaningless delays,” Tsipras told his Syriza party lawmakers. “But this does not mean we would discuss irrational demands.”
The mission chiefs overseeing Greece’s bailout program implementation left Athens on Tuesday. Government officials said talks would continue but the latest disagreements and a long-standing rift among the creditors on medium-term fiscal targets have clouded Greek hopes for a swift conclusion.
Unpopular labor reforms, including collective bargaining, a mechanism to set the minimum wage and giving companies more freedom to lay off workers are the main sticking point in talks with lenders.
Tsipras said differences could be bridged if there is political will on all sides, adding that an agreement could be reached by Dec. 5, when euro zone finance ministers will meet in Brussels.
“It is realistic but also absolutely necessary to conclude the talks soon to secure at the scheduled Dec. 5 … meeting the agreement needed on a political level in order to conclude the bailout review,” he said.
Tsipras said this would pave the way for talks on debt relief measures, not only in the short term but also in the medium and long term, which would allow Greece to lower primary surplus targets beyond 2018, when its bailout program ends.
Athens hopes that the conclusion of the review will also lead to its inclusion in the ECB’s bond-buying program early next year, which will help it to regain market access.
“We are still in the middle but we will continue swimming to reach the other side of the shore to pull the country out of the crisis,” Tsipras said.
Despite pre-election pledges to end austerity, Tsipras signed up to a new international bailout in July last year, the country’s third since the crisis began seven years ago.
His popularity ratings have been dropping for months and his leftist party is trailing the conservative opposition.