Greek Prime Minister Alexis Tsipras said on Tuesday he was confident of an outline deal with international creditors within two weeks, after shaking up his negotiating team and sidelining his finance minister who has infuriated euro zone partners.
Tsipras also said he would have to resort to a referendum if lenders insisted on demands deemed unacceptable by his leftist government, elected to scrap austerity.
Athens is weeks away from running out of cash, and talks with EU and IMF lenders on more aid have been deadlocked over their demands for Greece to implement reform measures, including pension cuts and labour market liberalisation.
In his first major television interview since being elected in January, Tsipras said he expected a deal with creditors by May 9, three days before a debt payment to the IMF of about 750 million euros ($815.5 million) falls due. He ruled out a default but stressed the priority was to pay wages and pensions.
Greek financial markets and the euro rallied on Monday on hopes that the relegation of Finance Minister Yanis Varoufakis, a Marxist academic prone to lecturing his euro zone peers, would improve prospects for an early deal to avoid a default that might lead to a Greek exit from the currency area.
Yet around half of investors expect Greece to leave the euro zone within the next 12 months, a survey published by German research group Sentix showed on Tuesday, highlighting market scepticism about politicians’ pledges.
The European Commission said talks on a cash-for-reform deal were making progress but gave no details of the substance.
Pressed on the options if no deal were found, Tsipras ruled out snap elections. But he said the government did not have the right to accept demands “outside our mandate”, and a deal that required such terms would have to be put to Greeks in a referendum.