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Greek ‘gestures’ mooted as pressure builds for debt deal

Greek Prime Minister Alexis Tsipras hinted on Tuesday that Athens could cede ground in its deadlock with creditors to try to avert a devastating default, as EU leaders considered holding an emergency summit over the crisis.

“The PM told me there are two or three gestures he can make,” pro-EU opposition politician Stavros Theodorakis said after meeting with Tsipras, adding: “He hopes that our European friends will make equivalent gestures.”

The embattled 40-year-old premier held a round of consultations with rival political leaders Tuesday to seek support for a potential compromise deal with the EU and the IMF with just two weeks before Greece’s massive international bailout expires.

Also at the end of the month, Greece faces a 1.6 billion euro payment to the IMF, with another 6.7 billion euros due to the European Central Bank in July and August, which Greek officials have said the government cannot afford.

It had been hoped that a deal could be reached by Thursday when the eurozone’s 19 finance ministers, who control the purse strings of the rescue programme, meet in Luxembourg.

Before his meeting with Thodorakis, Tsipras said: “It’s critical to close this vicious circle, not to be forced into a deal that will bring us back to the same position in six months.”

The Greek premier’s radical left Syriza party won elections in January with a promise to ease the hardship caused by five years of austerity imposed under two international bailouts since 2010 totalling 240 billion euros ($270 billion).

Tsipras also met a top conservative politician and the leader of the socialist party, and was to address Syriza lawmakers later Tuesday.

The government is resisting demands from the creditors to increase taxes and reform pensions, arguing that such measures have already failed to revive the recession-hit Greek economy.

The office of Greece’s top negotiator, junior foreign Euclid Tsakalotos, said the creditors were pushing for pension cuts and additional measures to bridge a perceived fiscal gap of 2.5 percent in 2016.

Greece says it has proposed measures enough to cover a 2.0 percent fiscal gap, which the creditors dismiss as “uncertain”.

– ‘Major contradiction’ in demands –

Tsipras said there was a “major contradiction” in the position of Greece’s creditors.

“The IMF asks for tough measures and debt restructuring, and the others ask for tough measures without restructuring,” he said.

Valdis Dombrovskis, the European Commission vice-president for the euro, said the creditors had shown “substantial flexibility”.

“What is now really needed is political will from the Greek side to do a final effort to reach an agreement,” Dombrovskis said in Vilnius.

“During the last month there has been substantial flexibility from the institution’s point of view.”

Meanwhile sources in Brussels said European leaders are considering holding an emergency summit on Greece this weekend but any decision will depend on the outcome of the Luxembourg meeting.

Despite the hints from Tsipras, Greek Finance Minister Yanis Varoufakis said Athens will not bring new reform measures to Thursday’s talks.

“The Eurogroup is not the right place to present proposals which haven’t been discussed and negotiated on a lower level before,” Varoufakis told Germany’s mass-circulation daily Bild.

– ‘Everything must be done’ –

The talks concerning the release of the 7.2 billion euros ($8.1 billion) in rescue funds remaining in Greece’s bailout have dragged on for five months.

The country is staggering under a debt mountain equivalent to 180 percent of GDP, or almost twice annual economic output.

“We are not far from a solution but as long as there is no solution there could be a crisis,” French President Francois Hollande said during a visit to Algeria.

He called on Greece to make “alternative proposals” and insisted that “everything possible must be done” to keep the country in the eurozone.

“If the Greek authorities have difficulties with some measures, it is possible to replace them with other measures of equal fiscal value,” Dombrovskis concurred.

The uncertainty weighed on Athens stocks, which dropped more than 3.5 percent in midday trade, the third straight day of decline.

Spanish Economy Minister Luis de Guindos said he expects an agreement and urged Athens to make an effort.

“I hope, trust, and this is the position of the Spanish government, that we will reach a deal with Greece,” he told reporters.

“I think we should all make an effort, I believe that institutions have already made en effort, the remaining nations, the eurozone beyond Greece, we have made and are willing to (make an effort), but of course the Greek government must also do it.”