The Greek government has expressed hope of an imminent deal with its EU creditors, despite a warning from the German finance minister, Wolfgang Schäuble, that the country could cut its debts only by leaving the single currency.



Athens is in a familiar stand-off with the German finance ministry as it seeks easier repayment terms on its €330bn (£280bn) debt pile, which the International Monetary Fund has described as unsustainable and explosive.



The IMF has so far declined to get involved in the latest Greek rescue effort, a three-year EU bailout worth €86bn set to run until August 2018. The fund says it will only join if Greece gets significant debt relief, although its board is split. Germany and the Netherlands, which both face elections this year, think the IMF’s involvement is crucial for the bailout plan to continue.



Tensions – and Greek borrowing costs – have risen in recent weeks, ahead of a meeting of eurozone finance ministers on 20 February, which is widely seen as the last moment to reach agreement before the eurozone election cycle. The Dutch go to the polls in March; French presidential elections follow in April-May and German elections in the autumn.



George Katrougalos, Greece’s Europe minister, voiced confidence that a deal was within reach: “I am optimistic that we can have such an agreement before the Eurogroup of 20 February.”

He told journalists in Brussels that Europe was not the problem. “If we had just to deal with the Europeans we would have already completed this review in December. All the delay is due to the ambivalence of the IMF to participate or not to participate.”



Katrougalos brushed aside comments from Schäuble, who has previously called for Greece to quit the eurozone. “Mr Schäuble is now an isolated voice in Europe, one of the last defenders of austerity,” he said, arguing that the German minister was not supported even in his own country.

Schäuble told ARD television on Wednesday that the EU’s Lisbon treaty ruled out a debt reduction for Greece. “For that, Greece would have to leave the monetary union,” he said. His stance has been supported by Germany’s Liberal party, currently in opposition, but the Social Democrats, the junior coalition partner, have voiced concern.

Katrougalos, a former MEP who joined the Syriza government following its election in January 2015, said Greece was not asking for a cut in the face value of the debt, but measures to make repayment easier. “We are not asking about haircuts, we are speaking about measures of debt relief,” he said.



“If we do not have a bold measure of debt relief, the Greek debt will not be sustainable. But we think we can have an agreement with our European partners on that exactly because it should not be a disputable issue. It is obvious.”



The EU has already promised some help to ease the burden of repayments, measures which eurozone officials say put Greece on a manageable path to cut its debts.

On Thursday, the head of the eurozone bailout fund insisted that there was no cause for alarm, as he stepped up criticism of the IMF’s gloomy prognosis. “The European Financial Stability Facility and the European stability mechanism, the eurozone’s rescue funds, have disbursed €174bn to Greece,” Klaus Regling, head of the ESM, wrote in the Financial Times. “We would not have lent this amount if we did not think we would get our money back.”



He said Greece had some of the lowest debt-servicing costs in Europe, conditions that would remain in place for a long time, and a factor the IMF had overlooked.

A spokesman for the fund said it was sticking to its forecast that Greece’s debts could hit 275% of GDP by 2060. “We stand by that [debt sustainability] analysis. Most executive directors are on the record as supporting that too,” he said, hinting at the boardroom split.

The Greek government agrees with the IMF’s forecast that it cannot reach a budget surplus of 3.5%, a key demand of EU creditors. “It never happened in the past and it cannot happen with an economy that is very much exhausted by six, seven years of austerity,” Katrougalos said.

But Athens disagrees with the fund’s call for further pension reforms. It is also lobbying its EU creditors to allow it to reintroduce collective bargaining. The minimum wage is currently set by the state as part of an earlier bailout agreement.

Katrougalos was meeting officials in Brussels, including the European commissioner for economic affairs, Pierre Moscovici, who has been one of Athens’s closest allies in the bailout saga.

Asked to explain his grounds for optimism for a February deal – given the history of missed deadlines and midnight brinkmanship – the Greek minister said no country had any interest in prolonging negotiations because of crucial elections. “Nobody has any interest in putting Greece in the midst of the problems of Europe. Europe has enough problems.”

But he criticised talk of snap elections in Greece, saying that would force the end of the bailout programme and rule out any new one. “Everybody calling for new elections in Greece is basically calling for a disorderly default.”