Greece, lenders must reach deal by early May, Deputy PM tells paper

Sat Apr 25, 2015 2:25pm EDT Related: GREECE

ATHENS

(Reuters) - Greece and its lenders must reach a reform deal by early May to address Greece's need for cash, Deputy Prime Minister Yannis Dragasakis said in an interview with a Greek newspaper published on Saturday.

Shut out of international markets and locked in talks with its European Union and International Monetary Fund creditors over its proposed reform-for-cash deal, Greece risks running out of cash within weeks. But euro zone finance ministers warned its leftist government on Friday that it would get no fresh aid until it agrees to a complete economic reform plan.

Athens must pay the International Monetary Fund almost 1 billion euros ($1.1 billion) in May. It has said it wants to honor its obligations and needs lenders to offer something in return.

"There is clearly a potential and an imperative need for an interim deal to be concluded in the first days of May, if not within April," Dragasakis said in an interview with Avgi newspaper, the mouthpiece of the leftist government of Alexis Tsipras.

"We are mainly requesting that the current liquidity problem be recognized as a problem of common responsibility and that it be jointly addressed", he said. "Otherwise, the country's ability to smoothly service its external obligations would be in an ever growing contrast to Greek people's survival."

Greek lawmakers approved a decree late on Friday to force state entities to lend cash to the central government in spite of protests by municipalities and labor unions.

The protests added to pressure on Tsipras, whose decision to battle lenders has become increasingly unpopular. According to a Kappa Research poll published in To Vima newspaper on Saturday, 72 percent of respondents said the country must strike a deal with its creditors versus 23 percent who were in favor of a clash.

Tensions with lenders and slow progress have prompted speculation that the government may be forced to call a snap election or a referendum if Greece fails to reach agreement with its lenders. But the government has ruled out such an option for now.

Asked by Kappa what the best options for Athens were in case of an impasse, 44 percent of Greeks wanted the government to handle the issue without seeking any kind of a fresh popular mandate. About 33 percent were in favor of a referendum, while 19 percent wanted a snap election.

Another poll by Alco for Proto Thema newspaper showed that 63 of those polled were concerned about a Greek default versus 32 percent who were not.

(Reporting by Angeliki Koutantou; editing by Jane Baird)