Saturday 16 May 2015 5:52 am

Greece's prime minister Alexis Tsipras lays down two red lines it won't cross in debt talks

Greek prime minister Alexis Tsipras has said the red lines his government will not cross in talks with creditors are further cuts to wages and pensions.

"I want to assure the Greek people that there is no possibility or change that the Greek government will back down on pension and labour issues," he said.

"Some cannot have in the back of their minds the idea that, as time goes by, the Greek side's resilience will be tested and its red lines will fade out."

Tsipras also said any agreement should include a debt restructuring – another very controversial issue. 

The cash-strapped country has been locked in high stakes talks with creditors over a list of economic reforms since February.

It wants to unlock billions of euros of credit, as it hasn't any tranches of loans from its €240bn euro bailout since last August.

Yet there are concerns it will default on its €320bn debt pile before this, with unknown consequences for the euro area.

And while Greece is eager to reach a deal by the end of this month the European Union and International Monetary say it must implement pension and labour reforms agreed with former Greek governments.

Nonetheless weeks of talks have yielded some progress with Tsipras saying the two sides found common ground on fiscal targets and VAT rates.

"At this stage, we seem to have found common ground with the institutions on a series of issues and so we are very close to an agreement", he said.