ATHENS Greece on Tuesday urged Germany to drop its "irrational" demand that it meet a 3.5-percent primary budget surplus over a 10-year period, and be "constructive" about calls to ease the cash-strapped country's debt mountain.
Athens and its international lenders agreed on Monday to resume talks on a bailout review, easing a standoff which had threatened to block the disbursement of another tranche of its 86-billion-euro ($90-billion) financial aid programme. It needs the money by the third quarter of 2017 to meet debt repayments.
"We expect the German finance ministry to back down on its irrational demand for primary surplus levels of 3.5 percent over a 10 year period, and adopt a constructive stance to allow the easing of Greece's debt over the medium term," government spokesman Dimitris Tzanakopoulos told a news briefing.
He said this would help build confidence in the Greek economy and pave the way for Greece's inclusion in the European Central Bank's bond-buying scheme which Athens needs to allow access to bond market again before its bailout ends in 2018.
"The aim of the government is a comprehensive agreement to provide the economy with the needed impetus to extricate itself from fiscal adjustment programmes, gradually return to money markets, and when the programme ends in August 2018 to be able to refinance its debt without borrowing from the public sector."
Bailout inspectors representing Greece's lenders are expected to return to Athens and resume talks on working out new reforms to pensions, income tax and labour laws.
At Monday's Eurogroup meeting of finance ministers, Athens agreed to new austerity measures from 2019 onwards that will be offset so the net impact will be fiscally neutral for taxpayers.
"The fiscal policy of the country in its entirety, depends on if and to what extent targets which will have been agreed with the lenders are met," Tzanakopoulos said.
"If we don't meet our targets then obviously the gap has to be filled. But I'm absolutely confident that based on the picture of the economy today and its performance, which could lead to a (2016) primary surplus topping 2 percent, there is no issue of missing the targets."
(Reporting by George Georgiopoulos; Writing by Michele Kambas; Editing by Louise Ireland)