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Europe says progress 'not sufficient' for Greece debt deal

24 April 2015, 11:16 CET
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Europe says progress 'not sufficient' for Greece debt deal

Valdis Dombrovskis - Photo EU Council

(RIGA) - The EU's top eurozone official warned Friday of insufficient progress in difficult debt talks with Greece to unblock sorely-needed bailout funds as cash-strapped Athens signalled compromise.

The statement by Valdis Dombrovskis came as the eurozone's 19 finance ministers met in Riga to discuss the worrying situation in Greece and dashed hopes that a deal ending months of deadlock and avert a dangerous cash crunch would be reached during Friday's talks.

"Progress in technical negotiations has not been sufficient to reach any conclusion during this Eurogroup here in Riga," said Dombrovskis, the EU Commissioner for the Euro, as he arrived for the meeting with eurozone finance ministers.

Athens is fast running out of money to both pay its creditors and run the everyday government, raising the risk of a default and a potentially chaotic exit from the single currency bloc.

But ministers refuse to unlock any cash without a comprehensive list of reforms that the far left Syriza government has so far refused to agree, forcing Athens to expropriate funds from local state agencies and authorities to stay afloat.

"Progress has been made, I hope a lot of progress will be reported. I'm going to listen to the institutions first today," said Eurogroup chairman Jeroen Dijsselbloem as he arrived for the talks.

For weeks, Greek officials and its international creditors have been locked in technical discussions over the reforms it must adopt in exchange for the funds, with a deadline originally set for the end of the month.

"April isn't over yet," Dijsselbloem said.

"But the deadline is more important from the Greek side than the Eurogroup.... to make sure that there is enough money available," he added.

The far leftist Prime Minister Alexis Tsipras swept to power in January on a promise to break off from the austerity demanded by Greece's EU-IMF creditors.

Defying his paymasters, Tsipras pushed new social legislation through parliament last month and has continued to refuse measures Syriza says were agreed by the previous government.

The anti-austerity measures angered creditors, but in a blog posted on Friday, Greek Finance Minister Yanis Varoufakis said differences with the eurozone were resolvable.

"The current disagreements with our partners are not unbridgeable," Varoufakis said, adding a list of potential compromises on some of the thorniest issues such as pension reforms and privatisations.

The main index on the Athens stock exchange shot up 4.4 percent after Varoufakis's comments were reported.

'What next?'

At an EU summit on Thursday Tsipras and Chancellor Angela Merkel of powerful Germany met briefly to discuss the stand-off, though little emerged from the meeting.

With no deal expected in Riga, expectations will shift to the next Eurogroup meeting on May 11 on the eve of Greece's next hefty debt repayment to the IMF.

"There's a message of urgency that we want to send. That message will be given to the Greek authorities," said Economic Affairs Commissioner Pierre Moscovici.

However, European officials are increasingly floating the end of the June as the true deadline for Greece, when the current 240 billion euro ($260 billion) programme expires.

"The crucial moment is the end of June. No one believes in prolonging the current programme," said French Finance Minister Michel Sapin.

"The real question, is what happens afterwards."

In Athens, government spokesman Gabriel Sakellaridis said that Greece refused the eurozone's "torture" and that Greece's struggling banks in particular must be aided.

"Grexit will not be our choice," he said.

For now, the idea that Greece will crash out of the eurozone remains the less likely scenario for officials, though warnings grow that its catastrophic consequences should not be underestimated.

"It will not happen overnight. There will be a painful, dirty process and it only happens if there is some mistake, some accident," said Polish central bank governor Marek Belka at a university speech in Riga.

"So I don't think Greece will leave the euro - that's not so simple," he said.

Eurogroup, 24/04/2015


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