ATHENS (Reuters) - Greece may extend a contingency mechanism by a year until 2019 to ensure it meets fiscal targets and end a stalemate in talks with its euro zone lenders and the IMF over a bailout review, Prime Minister Alexis Tsipras said on Friday.
Talks between Athens and the foreign lenders on its bailout progress have dragged on for months due to differences on labour and energy reforms as well as on fiscal targets and debt relief measures beyond 2018.
Greece's EU lenders want the country to achieve and maintain a primary surplus - after interest payments - of 3.5 percent of GDP beyond the programme's end in 2018. The IMF says that, unless Athens adopts more austerity measures into law upfront, the surplus will only reach 1.5 percent.
"The government can't accept and legislate extra measures beyond 2018. It can only legislate the extension of the fiscal adjustment mechanism for one more year," Tsipras said in a meeting with pensioners earlier on Friday, according to a statement from his office.
Athens has pinned its hopes for a conclusion of the second bailout review on a meeting of euro zone finance ministers in Brussels set for Jan. 26.
Government spokesman Dimitris Tzanakopoulos said earlier this week that Greece was willing to discuss fiscal contingency measures that would only be implemented if it missed budgetary targets beyond 2018.
Tsipras said on Friday that the mechanism would not be activated due to the dynamics of the Greek economy.