Alexis Tsipras Softens Stand on Greek Debt Relief Before Election

Athens: Outgoing Prime Minister Alexis Tsipras signalled on Wednesday he would accept an easing of Greece's huge debt burden if he wins elections expected next month without any of the write-offs he has long demanded.

Tsipras, who hopes to return to power with an absolute majority, told Alpha TV that he favoured longer repayment periods and lower interest rates on the debt, now that Greece has secured a new 86 billion euro ($98 billion) bailout.

But in the interview, he made no mention of writing off any debt - a campaign promise when he was elected in January that Germany, the biggest contributor to Greece's three bailouts since 2010, opposes.

With his radical left Syriza party split over the latest bailout, Tsipras heaped praise on his finance minister, Euclid Tsakalotos, and rejected the possibility that his ally may not even run in the election.

President Prokopis Pavlopoulos is expected to call the election on Friday, probably for Sept. 20, an official at the presidency told Reuters. This follows Tsipras's resignation last week when he lost his parliamentary majority due to a rebellion in Syriza ranks over the bailout's demands.

With Greece facing financial collapse and an exit from the euro zone, Tsipras caved in to the zone and IMF earlier this month by accepting their demands for yet more austerity and painful economic reforms - the very policies he had promised to reverse when he won power.

Tsipras has long argued Greece cannot repay all its debt and needs part of it cancelled to return to long-term economic growth after a depression, a view shared by many mainstream economists and possibly even the International Monetary Fund.

But on Wednesday he appeared to change tack on debt write-offs, raising only the scenario of "an elongation of maturities and a lowering of the interest rates".

"We will have what economists call fiscal space to repay the debt. This would be the first step for us to return to the markets and regain their trust, if of course simultaneously we have managed to return to positive rates of growth," he said.

While Syriza wants an outright majority - something it narrowly missed in January - the strength of its support is unclear due to a lack of surveys by leading pollsters in the past month when much has changed. Last week, 25 out of Syriza's 149 lawmakers walked out to form a new anti-bailout party.

Finance Minister "Will Run"

The defection has done nothing to heal the rift in Syriza. Many of the 43 lawmakers who refused to back the bailout in parliament remain in the party, at least for the time being.

But more seriously, there are also misgivings among members of Syriza's mainstream "53+" faction, including lawmakers who reluctantly backed the bailout for the sake of the party and the nation.

These include Tsakalotos, the British-educated economist who clinched the deal, and former government spokesman Gabriel Sakellaridis, members of the faction said. "Neither Tsakalotos nor Sakellaridis have yet made clear whether they will run in the upcoming election," a member of the faction told Reuters.

Tsipras signalled he had won them over, saying both would run for Syriza. "Euclid Tsakalotos has done a marvellous job and it's true that if he wasn't for him, we wouldn't have achieved a deal," he said.

This warmth contrasted to the scorn he poured on his previous finance minister, Yanis Varoufakis, who became a cult figure among anti-austerity campaigners across Europe for attacking the euro zone establishment.

Tsipras recalled one session of particularly tough negotiations in June - just before he closed Greek banks for three weeks to save them from collapse - with IMF chief Christine Lagarde, European Central Bank head Mario Draghi and European Commission President Jean-Claude Juncker.

"Varoufakis was talking but nobody paid any attention to him. They had switched off, they didn't listen to what he was saying," said Tsipras. "He had lost his credibility."

Tsakalotos has won the trust of his fellow euro zone finance ministers despite his left-wing views. But he has yet to confirm his candidacy in the election.

Under the Greek political system, Tsakalotos could still serve in a future government even if he is not a member of parliament. But if he failed to run for Syriza, this would be a blow to Tsipras who needs the "53+" faction if he is to hold the party together, win the election and implement the bailout programme.

President Pavlopoulos has asked a conservative and the leader of the new anti-bailout party to try to form a new government but the former has already failed and the latter is due to give up formally on Thursday.

The official at the presidency stressed that the timetable could still change, but Pavlopoulos intended to appoint a caretaker premier, Supreme Court judge Vassiliki Thanou, on Friday and call the election. Thanou would become Greece's first female prime minister, but only until a new government is formed.