Greece on Monday 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.
“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 programme 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 proposal reported by the media.
“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 privatisations 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.
Athens 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? –
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.
Around 1.5 billion euros are now due to the IMF in June, and then more than six billion euros must be paid to the European Central Bank in July and August.
This year is Greece’s “toughest in terms of bond maturities until 2030,” Sakellaridis said.
German Economy Minister Zigmar Gabriel over the weekend floated the idea of a third bailout package for Greece if reforms are implemented.
The country is currently on the tail end of back-to-back bailouts totalling 240 billion euros, and the prospect of another lifeline remains controversial for many of its eurozone partners.
However, as Greece remains unable to borrow on the markets, another bailout seems inevitable given its financial needs this year, Greek daily Naftemboriki said Monday.
“By the end of December, the state must repay 12.55 billion euros in (principal) debt and 2.95 billion in interest,” and therefore the 7.2 billion euros left in its current bailout “does not suffice”.
Another 1.5-1.6 billion must be paid in salaries and pensions each month, plus 8.2 billion in state support must be given to pension funds between June and December, Naftemboriki said.