Stalemate over Greek bailout deal

Greek Finance Minister Yanis Varoufakis is under fire from eurozone over 'delaying tactics'. Picture: AP
Greek Finance Minister Yanis Varoufakis is under fire from eurozone over 'delaying tactics'. Picture: AP
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GREECE remains at loggerheads with its European creditors over an economic reform programme required to unlock bailout loans the country will need to avoid defaulting and crashing out of the euro.

At a meeting in Latvian capital Riga, Greek finance minister Yanis Varoufakis came under fire from his peers in the 19-country eurozone for failing to come up with a comprehensive list of economic reforms after weeks of slow progress.

For some normally restrained finance ministers, it was time to express discontent at what they perceive to be delaying tactics on the part of the left-wing Greek government, which came to power just under three months ago.

“It was a very critical discussion,” Jeroen Dijsselbloem, the eurozone’s top official, said. Others spoke of being “tired” and a little bit “annoyed” with the way the talks are going.

It wasn’t meant to be like this. Two months ago, Greece secured an agreement from the eurozone to get the remaining €7.2 billion (£5.15bn) in its bailout fund but only if it came up with a mutually agreed set of reforms.

An end-of-April deadline was considered achievable and markets breathed a sigh of relief that the threat of bankruptcy and a Greek exit from the euro had been averted.

But with days to go until that self-imposed deadline, Athens hasn’t even presented a full list as it haggles with representatives of the European Commission, European Central Bank and International Monetary Fund.

European officials are now talking of a new deadline of the end of June, when the European part of Greece’s bailout programme officially ends. How the country can continue to pay wages and salaries and meet its debt commitments, notably to the IMF, in that period remains sketchy.

The decision this week by the Greek government to scrape together spare cash from municipalities and state enterprises such as hospitals and the national gallery is likely to buy it some time. The move could, according to independent estimates, rake in €2bn, which would cover its debt payments next month.

Mr Dijsselbloem conceded there had been a step-change in Athens’ appetite for discussion over the past few days but said “significantly more progress” was required from Athens.

He spoke of “wide differences” between the sides, without specifying where the problems lay. He also ruled out that the creditors might consider a half-way deal that could give Greece part of the pending rescue loans.

Greece’s Mr Varoufakis sought to portray the discussions in a more positive light.

“We look at the last few weeks and what we see is convergence,” he said, noting progress on issues such as privatisation, reforming the tax system, the judiciary, the bureaucracy and product markets. A deal will happen, he added, “and will happen quickly, as it’s the only option we have”.

He said the sticking points related to pensions and the level of the budget surplus after debt and interest payments are stripped out – a higher level would mean the government had less money to spend on its priorities.

“This is a European family that needs to work out its difference in a collegiate manner,” Mr Varoufakis said.

The next possible date for a deal could be 11 May, when the eurozone’s finance ministers are due to meet.