Greek gov't promises not to reneg on credit agreement amid mounting dissent within ruling coalition

Greek government officials admitted on Thursday Greece faces severe liquidity challenge in coming weeks, reassuring that there will not be a credit event, as they were working closely with international lenders to resolve the matter.

"Greek economy faces indeed liquidity issues. We knew this before assuming power. The government is doing anything possible to address the challenge," government spokesperson Gavriil Sakellaridis told a local radio on Thursday, adding that the problem will be tackled in cooperation with partners to the benefit of all sides.

"There will not be a credit event. It is in nobody's interest," State Minister Alekos Flambouraris stressed while speaking to another radio station, appearing confident that the problem will be resolved through the measures introduced, in particular through combating tax evasion.

Under last week's Eurogroup deal the disbursement of further aid to Athens will resume after the successful review of the latest commitments undertaken in April.

With state coffers running low, Greece is estimated that it needs about 6.8 billion euros to cover its financial obligations until then.

Greek officials appeared optimistic that they will handle the payment of pensions, salaries or civil servants and other financial needs in coming weeks, but expressed reservation over a 1.5 billion euro repayment of an International Monetary Fund loan in late March.

Flambouraris said on Thursday that they would most likely ask for a two month extension if needed, while the Finance Ministry was said to be discussing solutions with lenders, such as the increase of the ceiling of the issuance of treasury bills and the return from the European Central Bank of 1.9 billion euro profits from Greek bond holdings.

The newly elected Left-led administration was also facing another major challenge-mounting dissent within the ruling Radical Left SYRIZA party on the February 20 arrangement.

The terms of the four-month extension of the four-year bailout program which expires on February 28 until a final deal with lenders on the resolution of the Greek debt crisis is reached, have not received a warm welcome from all party members.

For a second consecutive day on Thursday Prime Minister Alexis Tsipras was trying to convince MPs and other party officials that despite concessions made compared to pre-election promises, the arrangement was a positive step that will lead to the eventual realization of SYRIZA's policy program.

A marathon meeting of the parliamentary group ended in early Thursday with about 40 deputies out of 110 attending casting blank votes or voting against the deal in a test voting held behind closed doors.

SYRIZA holds 149 seats in the 300-member strong parliament and concern increased that if the agreement will be put for vote at the chamber, several party members would reject it.

The 40-year-old Premier would have to count on the votes of his Right-wing coalition partners of the Independent Greeks and opposition parties like the conservative New Democracy party for a positive outcome.

Prominent SYRIZA deputies, such as Parliament Speaker Zoi Konstantopoulou, have argued over the past few hours against having the agreement go through the parliament, "because then SYRIZA would be bound by the bailout obligations of the previous government."

SYRIZA's chief economist John Milios joined on Thursday the chorus of critics of the government's direction with an article which increased tensions.

Milios dismissed Friday's deal as a first step on a slippery slope. He saw a dramatic retreat from SYRIZA's pre-election economic policy program and called on the government to change course and implement measures to face the humanitarian crisis and kick-start the ailing economy without concessions. Endit