Athens officials, creditors locked in tough talks over bailout

Greek Finance Minister Euklid Tsakalotos was visibly exhausted on Monday morning after he emerged from overnight talks with the country's creditors in Athens, private broadcaster Skai reported, as Greece negotiates the terms of its bailout.

Officials from the European Central Bank, the International Monetary Fund (IMF), the European Stability Mechanism and the European Commission began a new round of talks with Athens on April 4 to review Greece's progress on bailout commitments made last summer.

After pausing the talks on Friday to consult in Brussels, the quartet returned to Athens the same day and restarted negotiations on Saturday.

The situation grew so complicated on Sunday that the governor of Greece's central bank, Ioannis Stournaras, was called in overnight and took part in the talks for two hours, state TV reported.

State broadcaster ERT reported that the talks were due to continue on Monday afternoon.

The creditors and Greek officials have so far failed to agree on the measures Athens must implement in order to save 5.4 billion euros (6.2 billion dollars) and thereby gain access to another round of credit as part of its third bailout package of up to 86 billion euros.

The proposed measures encompass tax hikes, laws on bad loans and additional pension reforms.

But it remains to be seen what concessions Greece is prepared to make, as Prime Minister Alexis Tsipras sent a strong message against further cuts in a joint statement Monday with his Portuguese counterpart and fellow socialist Antonio Costa.

The two leaders, both of whom are under pressure from the European Union to limit public spending, said that the bloc must abandon its push for austerity, calling instead for "a progressive Europe with social fairness."

"With the growth of poverty and social inequality, our countries and Europe face a long period of economic stagnation," Tsipras and Costa said.

While Greece has a long way to go before it gets its deficit under control, Portugal has displayed model behaviour in recent years in its implementation of budget cuts. There are, however, fears in Brussels that Costa's new left-wing government could derail Lisbon's savings programme.

The Munich-based Ifo economics institute charged Athens on Monday with stalling on agreed financial reforms.

"The requirements of the third bailout package for Greece have only been tackled half-heartedly in the last seven months; and yet the new money is being spent," said Niklas Potrafke, head of the institute's centre for public finance.

Nonetheless, European Commission spokeswoman Mina Andreeva expressed optimism that Greece would fall into line.

"Progress has been made over the weekend and talks are continuing in Athens today. Our aim remains to conclude the review as soon as possible," she said in Brussels.

On Sunday night, German Finance Minister Wolfgang Schaeuble called on Greece to fulfill the requirements for further aid.

"We will find a solution in the coming weeks, but it will have nothing to do with cancelling debt," Schaeuble told Germany's public broadcaster ARD, adding that Athens needed to do more to improve its economic competitiveness.

Interest rates have already been deferred for ten years, the minister said, and the loans would have a duration of up to 35 years.

"We are helping Greece," Schaeuble said. "We are buying them time. We will also find a solution this time."

Last update: Fri, 24/06/2016 - 08:49
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