Greece in final stretch of troubled loan talks

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ATHENS: Greece on Monday (Tuesday in Manila) entered the final stretch of tortuous talks with its international creditors on a bankruptcy-saving loan deal, with the government calling for a breakthrough by the end of the month.

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“A deal is required immediately, this is why we are talking about the end of May, to resolve these critical liquidity issues,” government spokesman Gabriel Sakellaridis told reporters.

Greece’s new radical Syriza-led government and its EU-IMF creditors have been stuck in a deadlock for four months over the reforms needed to release a final 7.2 billion euros ($8.2 billion) in bailout funds.

European economic affairs chief Pierre Moscovici lamented that the Greek anti-austerity government seemed more interested in ditching promised reforms than in making proposals of its own.

“They are more eager to say what they don’t want to keep in the program than to propose alternatives,” Moscovici told a news conference in Berlin, while insisting that “some progress” had been made in some areas in recent days.

Later Monday, To Vima daily reported a European Commission proposal to break the deadlock.

It offered to give Athens next month a combined 3.7 billion euros in EU and ECB funds from the ongoing bailout in return for legislation on fiscal measures worth 5.0 billion euros, To Vima said.

Both the Greek government and the European Commission could not confirm the reported proposal.

“We are not aware of such a proposal. We continue to work towards a comprehensive deal, together with the ECB and the IMF, as well as the Eurogroup. Progress is being made, albeit at a slow pace,” Commission spokeswoman Annika Breidthardt said in Brussels.

Moscovici insisted that the “only scenario we consider at the Commission is a strong Greece in the eurozone.”

He added that “nobody is working on others. We all consider that it’s possible to reach an agreement.”

Athens objects to further wage and pension cuts in an economy sapped by a six-year recession, but has offered to make a number of privatizations and step up tax collection.

The delay has led to concerns Athens is running critically short of cash and may soon end up defaulting, which could set off a messy exit from the euro.

The country faces a hefty repayment schedule to the International Monetary Fund and the European Central Bank in the coming months, and also needs to continue paying salaries and pensions.

Third bailout?
“I think we are very close to an agreement”, Finance Minister Yanis Varoufakis said on Greek television late Monday, pointing to “maybe in a week.”

“A break with creditors is not in our plans” nor “a change of currency,” he said.

At the same time, Varoufakis said “pensions and salaries were sacred . . . an absolute priority” and that he would “prefer a default with the IMF rather than on salaries.”

Over the weekend, Greek newspapers reported that the country came close to not making a 750-million-euro debt repayment to the International Monetary Fund last week.

AFP

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