Huge gaps to bridge in Greek negotiations

April 17, 2015

Greek Finance Minister Varoufakis speaks at the Brookings Institution in Washington

Prime Minister Alexis Tsipras told Reuters on Thursday he was “firmly optimistic” of reaching an agreement with Greece’s creditors. But he acknowledged that the two sides disagreed on four major issues: labour rules, pension reform, a hike in value-added taxes and privatisations.

IMF chief Christine Lagarde said there was no question of any delay to payments Athens owes the Fund, though the Greek finance ministry said it had made no such request. She also said Greece must reform its pension system.

Greece is close to running out of cash and could be forced by next month to choose between making debt payments, including to the IMF, or paying public salaries and pensions.

Tsipras did not say whether the government had room to offer further concessions demanded by lenders, who want Athens to reform its pension system further, raise VAT on some items and continue with the privatisations programme.

As has become customary, Finance Minister Yanis Varoufakis delivered a message, after talks with Lagarde, that could be read either way. “We are going to compromise, compromise, compromise, without being compromised,” he said. “We will not sign up to targets we know our economy cannot meet.”

Ukraine is due to give an update on talks with its creditors about reducing its debt burden.
A presentation will be given in Washington by Finance Minister Natalia Yaresko, central bank chief Valeriia Gontareva, debt envoy Vitaly Lisovenko and the chairman of Ukreximbank, the terms of whose bonds Ukraine also wants to renegotiate in talks with investors as part of a drive to cut its debts by $15 billion.

A day after Vladimir Putin declared that Russia could return to growth in less than two years, both Standard & Poor’s and Fitch are due to review his country’s credit rating. A bounce in the oil price has helped a little but there is no sign of western sanctions being eased yet.

A snap opinion poll declared opposition Labour leader Ed Miliband the winner of the final TV debate ahead of Britain’s May 7 election. Prime Minister David Cameron did not take part in the event featuring five opposition party leaders.

Miliband’s gamble was that the event would be an opportunity to showcase his leadership credentials – which are frequently called into question by Britain’s mostly right-leaning press – and to close the gap between his and Cameron’s personal ratings.

Cameron’s bet was that accusations of running scared were a price worth paying for depriving his main opponent of an opportunity to turn the tables on him. The opinion polls over the next few days will tell us who was right.

Unemployment and average earnings data are due later. The jobless rate has dropped consistently under this government but living standards have not risen, meaning many Britons feel no benefit of a robust economic recovery.

In France, Marine Le Pen’s National Front executive meets to deliberate her father and party founder Jean-Marie Le Pen after his renewed remarks that gas chambers were a detail of World War Two history.

Le Pen senior, FN honorary president, has since done much to defuse a potentially damaging feud by saying he will no longer run for elected office in regional elections.

Yemeni Vice President Khaled Bahah said on Thursday he hoped a Saudi-led Arab coalition battling Iranian-allied Houthi rebels in Yemen would not send in ground troops, even though three weeks of air strikes do not appear to be reversing gains.

Arab military exercises planned for Saudi Arabia have raised speculation that the coalition led by Riyadh, which has been bombing the Houthis from the air for three weeks, is considering land operations.

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