Greece wants EU/IMF deal but impasse could bring referendum: deputy PM

Reuters News
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Posted: Apr 18, 2015 2:53 PM

ATHENS (Reuters) - Greece aims for a deal with its creditors over a reforms package but will not retreat from its red lines, the country's deputy prime minister told the Sunday newspaper To Vima, not ruling out a referendum or early polls if talks reach an impasse.

Athens is stuck in negotiations with its euro zone partners and the International Monetary Fund over economic reforms required by the lenders to unlock remaining bailout aid.

Ongoing talks are not expected to produce a deal for the approval of euro zone finance ministers at their next meeting in Riga on April 24 as progress is painfully slow.

"Our objective is a viable solution inside the euro," Yannis Dragasakis told the paper. "We will not back off from the red lines we have set."

Asked whether the government had thought of calling a referendum or even going to the polls if talks become deadlocked, Dragasakis said this could be a possibility, although the government's goal was to reach an agreement.

"In the back of our minds these are possibilities of finding a way out, if there is a dead end. The aim is (to reach) an agreement."

Greece is quickly running out of cash and in the next few weeks may face a choice of either paying salaries and pensions or paying back loans from the International Monetary Fund.

Shut out of bond markets, Athens could get more loans from both the IMF and euro zone governments, but it would first have to implement reforms, agreed with the creditors, to make its finances sustainable and its economy more competitive.

The leftist-led government does not want to implement measures including cuts in pensions as it won elections in late January on pledges to end austerity.

(Reporting by George Georgiopoulos; Editing by Rosalind Russell)