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France: Greek Bailout Talks Headed in Right Direction

  • Associated Press

French Minister of Finance Michel Sapin arrives at the committee on economic and monetary affairs in Brussels, Belgium, May 7, 2015.

French Minister of Finance Michel Sapin arrives at the committee on economic and monetary affairs in Brussels, Belgium, May 7, 2015.

France says talks between Greece and its bailout creditors are going the right way and hopes that Monday's eurozone meeting will see the sides narrow their differences enough to have a deal "within hand's grasp.''

Finance Minister Michel Sapin told EU legislators Thursday that "the risk of things running off the rails for Greece also entails that risk for Europe,'' so a compromise is needed.

Greece and its European creditors have been at an impasse for over three months on what reforms the country should make to get more rescue loans to keep it solvent. A potential Greek debt default could threaten Europe's joint currency and roil the global economy.

Sapin called for a "push toward a compromise'' at Monday's gathering of eurozone finance ministers. He said there was a degree of flexibility in the talks, which are currently centered on state revenue policies, such as taxation.

"We will not get there [May] 11th but in the days that follow because it is absolutely necessary,'' Sapin said.

Greek Finance Minister Yanis Varoufakis agreed action was quickly needed. "I trust that an agreement will be in the offing in the next days, mostly weeks,'' he said at a business forum in Brussels.

The Greek government has been hesitant to make reforms that might hurt the living standards of Greeks, who have been through five years of brutal spending cuts and tax increases. The creditors want to make sure Greece's economy and public finances are on the right track so the country can pay its loans back.

Greek government spokesman Gavriil Sakellaridis said both sides need to compromise. "In a negotiation, there must be mutual concessions,'' he said.

Greece is running out of cash and faces a repayment to the IMF on Tuesday worth over 700 million euros. To make it, it will have to scrape together spare reserves from local governments and state entities like hospitals.

Sakellaridis said Greece intends to meet all its financial obligations, both domestic and international.

Still, Greece is expected to be saddled with an overall debt of 180 percent of gross domestic product next year, and within the eurozone there is a realization that aid will need to keep coming.

"We have to look at support beyond the end of June,'' said Sapin when the European part of Greece's bailout expires.

Belgium backs the long-term approach. "We can give more time to Greece. But to do that, they need to be sure that it's possible to have a real good program of reforms,'' said Foreign Minister Didier Reynders.

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