Varoufakis: To achieve an agreement, Greece and EU partners must accept some realities

(ANA – MPA / Star News) For the ongoing negotiation between Greece and its EU lenders requires that both sides accept some realities, Greek Finance Minister Yanis Varoufakis said on Monday, adding that the long negotiations are nearing an agreement.

“For the negotiation to be properly concluded, it requires us to change ethics and customs and our lenders to accept the memorandum logic has failed in the case of Greece and it should be cast aside,” the minister told participants at the annual general meeting of the Hellenic Federation of Enterprises (SEV).

He said the agreement will include fiscal measures included in the 2015-2019 mid-term plan, adding that announcing the achievement of such a deal would “suffice to usher in a new promising era.” It would also unlock much needed reforms in taxation, social security and the labour market.

Varoufakis noted that the objectives set for the primary surplus and economic growth are “mutually exclusive” and the government’s proposal is to set the primary surplus goal at levels that are consistent with the growth rate.

Describing his vision for the Greek economy for the period after June, the minister noted five prerequisites:

The first would be to rationalize the structure of Greece’s debt “without haircuts or dramatic changes” and reiterated his proposal for a debt swap to repay the bonds held by the European Central Bank (ECB), with the mediation of the ESM, while the Greek state would pay ESM for the bonds over time. He also proposed linking repayment interest rates with growth rates.

Secondly, privatisations and the exploitation of public property should take place with a circumspect mixture of privatizations in which the state would preserve a share to be used as an asset in a future development Bank.

The third point would be to establish a public company that will manage non-performing loans with the participation and contribution of the Hellenic Financial Stability Fund.

A fourth point concerns fighting poverty and the fifth would include agreeing to a reform package which will end the previous period and initiate the period after the memorandums.

The Monday night interview on Star Channel

Later on Monday at a high profile late night interview at Star Channel, Ston Eniko, the Greek finance minister said he is hopeful that Greece will reach a deal with its creditors very soon, adding that there will be no more cuts on pensions. “Pension cuts are not reforms” he said.

“The Greek government may take measures concerning early retirement. Some employees, for example bank employees, have the advantage of early retirement this is something that we may change,” he said. “Banks thus pass on part of their wage bill to the state”.

However, he added “If we face a dilemma over paying one of the lenders or wages and pensions, then we will opt to pay wages and pensions,” he said

Varoufakis also said he would reject any compromise that the Greek government considered to be “non-viable.”

Athens has defended “red lines” beyond which it will not be pushed in its talks with the lenders. These include further pension cuts and increased market liberalization.

“I assure you that if we face a dilemma between paying a creditor who refuses to sign an agreement with us and a pensioner, we will pay the pensioner,” Varoufakis told the television channel. “I hope we will be able to pay both.”

Varoufakis ruled out the possibility of a referendum on the terms of an agreement, saying it would effectively be a vote on whether to keep the euro as a currency.

“It would be unfair for Greek citizens to have to take a position on such a matter, answering with either a yes or a no,” he said.

He warned that Greece is in a state of “financial strangulation,” and criticized the lack of liquidity that the country was being subjected to.

“The lack of liquidity is neither the choice nor the responsibility of the Greek government,” he said. “It is a tough negotiating tactic of our partners, and I do not know whether everybody in Europe feels proud of it,” he said.