Greek PM Tsipras vows to pay off loans

Tsipras said Saturday he believed his government could reach a deal with the European Union and the International Monetary Fund (IMF) on Greece's debts.

"No side is seeking conflict and it has never been our intention to act unilaterally on Greek debt," the prime minister said in a statement hours before Finance Minister Yanis Varoufakis left for Paris to seek support for a renegotiation on Greece's massive loans.

The new Greek government, led by the left-wing Syriza party, has said it wants to halve the country's debt, which still amounts to more than 315 billion euros ($355.48 billion) despite a debt restructuring at the start of 2012 that cut the burden by some 100 billion euros. At more than 175 percent of gross domestic product (GDP), the sum is a record for the European Union.

The government has also pledged to roll back austerity measures imposed by the European Union and the International Monetary Fund in exchange for a 240-billion-euro ($269-billion) bailout granted to avoid a financial meltdown in 2010.

'Time to breathe'

The first meeting between the new government and Greece's financiers on Friday ended without any breakthrough. Tsipras will meet Italian Prime Minister Matteo Renzi and French President Francois Hollande next week to present his proposals for solving the debt problem. No visit to Germany, which is Europe's biggest economy and effective paymaster, has yet been planned.

"My obligation to respect the clear mandate of the Greek people with respect to ending the policies of austerity and returning to a growth agenda in no way entails that we will not fulfill our loan obligations to the European Central Bank or the IMF," said Tsipras.

"On the contrary, it means that we need time to breathe and create our own medium-term recovery program" by balancing the country's budget, clamping down on tax evasion, tackling corruption and ending policies that favor the rich, he added.

Greece's Economy Minister Giorgos Stathakis has suggested it would be better to link the country's debt repayments to its economic growth rate.

"At the moment, we spend around 5 percent of gross domestic product on servicing our debt. ...It would be better if we linked the repayment to growth: if growth is higher, we pay more, if it is lower, we pay less," Stathakis said in an interview with German magazine Der Spiegel.

Germany rejects debt relief for Greece

Meanwhile, German Chancellor Angela Merkel has opposed any idea of offering more debt relief to Greece.

Merkel told the German daily Hamburger Abendblatt's Saturday edition that banks and creditors had already forgiven a considerable amount of Greece's debt and that she rejected any further concessions.

"There has already been voluntary debt forgiveness by private creditors, banks have already slashed billions from Greece's debt," Merkel told the paper, adding: "I do not envisage fresh debt cancellation."

But she added that she still wanted Greece to remain part of the eurozone.

"Europe will continue to show its solidarity with Greece, as with other countries hard hit by the crisis, if these countries carry out reforms and cost-saving measures," she said.

Merkel's comments were echoed by German Finance Minister Wolfgang Schäuble, who told the Saturday edition of Die Welt newspaper that he saw no need to talk of any debt reduction, as "anyone informed about the financing of Greek debt knew that by 2020 there would be no problems."

shs/cmk (AFP, AP, dpa, Reuters)