Greece Confident Of Agreement Ahead Of Eurozone Negotiations

A boy holds a Greek flag during an anti-austerity, pro-government demonstration in front of the Greek Parliament in Athens on
A boy holds a Greek flag during an anti-austerity, pro-government demonstration in front of the Greek Parliament in Athens on February 15, 2015. Prime Minister Alexis Tsipras said he was 'confident' about progress in renegotiating Greece's debt at a crucial eurozone meeting on February 16, in an interview with German media. AFP PHOTO / ANGELOS TZORTZINIS (Photo credit should read ANGELOS TZORTZINIS/AFP/Getty Images)

By Jeremy Gaunt and Karolina Tagaris

ATHENS, Feb 15 (Reuters) - Greece said on Sunday it was confident of reaching agreement in negotiations with its euro zone partners but reiterated it would not accept harsh austerity strings in any debt pact.

A day before a euro zone finance ministers' meeting in Brussels to shore up with Greece's dwindling finances and help keep it in the euro zone, Prime Minister Alexis Tsipras told Germany's Stern magazine Athens needed time to implement its reform program and shake off the mismanagement of the past.

"I expect difficult negotiations; nevertheless I am full of confidence," he said. "I promise you: Greece will then, in six months' time, be a completely different country."

The Eurogroup of finance ministers meets in Brussels on Monday to try to find common ground with Tsipras' new leftist government, elected on a pledge to scrap the austerity strictures of Greece's international bailouts, on issues such as debt management, financing, privatization and labor reform.

If the meeting produces no results, there is a concern that Greece will be headed for a credit crunch that would force it out of the euro zone. Progress, however, could mean further negotiations, perhaps later in the week.

"The irresistible force will be meeting the immovable object," Vasileios Gkionakis, head of global FX strategy at UniCredit, wrote in a note.

European Central Bank President Mario Draghi refused to discuss the possibility of Greece leaving the euro zone if an agreement with European Union/International Monetary Fund lenders fell apart as a result of Greece's demands to alleviate its debt burden. He simply reiterated the euro zone's founding position that membership is "irreversible."


Tsipras wants a bridge program to be put in place for a few months while a new deal is agreed to replace the bailout, which has already forced drastic cutbacks onto ordinary Greeks.

The rest of the euro zone, particularly Germany, says Greece must continue with those commitments as a quid pro quo for the 280 billion euros ($320 billion) it has received in bailouts.

Slovak Finance Minister Peter Kazmir, whose country is said to be taking a tough line, tweeted that he was skeptical whether all details could be agreed on Monday.

Greece's current bailout expires at the end of the month. A Eurogroup meeting last week ended without apparent progress although technical talks were later approved.

Greek government spokesman Gabriel Sakellaridis showed no sign that Greece was easing back on its core demand.

"The Greek government is determined to stick to its commitment towards the public ... and not continue a program that has the characteristics of the previous bailout agreement," he told Greece's Skai television.

"What we have agreed on is that there is a need for a national reform plan, which European partners are listening closely to, and positively to tackle steady problems in Greece's economy and society that date back decades."

Some of the problems facing the Eurogroup are semantic. The Greeks, for example, will not countenance anything that smacks of an "extension" to the old bailout, preferring something new called a "bridge" agreement.


This is political. Tsipras rode into power on a wave of anti-austerity and anti-bailout anger last month and would have a hard time explaining a row-back so soon. Thousands of Greeks massed outside parliament in Athens on Sunday to back his strategy.

But even a cosmetic change of labels could have practical consequences. An "extension" may not require many national ratifications unless it involves additional financial commitments from euro zone governments.

But any new bailout program might require several national parliamentary ratifications and could also bring Germany's Constitutional Court into play.

Among those requiring a parliamentary vote on a new bailout are Germany, Slovakia, Estonia and Finland, all identified by one veteran of EU meetings as part of a hard core of opponents to Greece's plan.

The Eurogroup's main debate with Greece's "no-austerity" stance will revolve around the funding of a bridge program, Greece's request to reduce the 'primary' budget surpluses, excluding interest payments, that it is required to reach, and privatizations and labor reform.

Greece said on Saturday that it was reviewing a 1.2 billion euro deal for Germany's Fraport to run 14 regional airports, one of the biggest privatization deals since Greece's debt crisis began in 2009. It has also pulled the plug on the privatization of the ports of Piraeus and Thessaloniki.

On the question of liberalizing labor markets, government spokesman Sakellaridis remained tough:

"We will discuss it with workers and with pensioners. Whatever we do we will do through dialog. We will not legislate at the sole behest of outside factors." ($1 = 0.8785 euros) (Additional reporting by Costas Pitas in Athens, Paul Day in Madrid and Jan Lopatka in Prague; Editing by Kevin Liffey)