Wide differences over pension and labour reforms continued to dog intensive negotiations between Greece’s leftist government and its international creditors despite progress in other areas as the country’s cash position becomes increasingly critical.
Government spokesman Gabriel Sakellaridis sounded the alarm yesterday, saying that while Athens intended to meet all its payment obligations, including nearly one billion euros to the IMF in May, it needed fresh funds before the end of the month.
“Liquidity is a pressing issue,” Sakellaridis told a news conference. “The Greek government is not waiting until the end of May for a liquidity injection. It expects this liquidity to be offered to the Greek economy as soon as possible.”
Labour Minister Panos Skourletis said the International Monetary Fund, Greece’s second biggest creditor after euro zone governments, was insisting on tough policy conditions for an interim deal to unlock frozen bailout aid.
The global lender was unyielding in demands for pensions cuts, rules to ease mass layoffs of private sector workers and opposition to a government plan to raise the minimum wage, Skourletis told Mega TV.
Greece faces repayments to the IMF totalling €970 million by May 12. It has been borrowing from municipalities and government entities to meet obligations.
Intensive talks on an interim deal between a reshuffled Greek negotiating team and representatives of the European Commission, the European Central Bank and the IMF, renamed the “Brussels Group”, have been under way since last Thursday.
A European Commission spokesman said the negotiators worked through the weekend. Talks were “constructive” but work remains, he said, declining to give details.
The Greek government expects liquidity to be offered to the Greek economy as soon as possible
The aim is to achieve a technical-level accord that would enable euro zone finance ministers to declare when they meet on May 11 that there is a prospect of concluding the bailout review successfully. That could give the ECB grounds to permit Greek banks to buy more short-term treasury bills, easing the government’s cash crunch.
On Sunday, Greek and euro zone officials reported progress on some issues and forecast a result by Wednesday, when the ECB holds its weekly review of emergency lending to Greek banks. A euro zone official said there was more convergence on some areas than others.
Skourletis made clear that social policies which Prime Minister Alexis Tsipras’ radical Syriza party has declared “red lines” were the main stumbling block.
Tsipras yielded some ground last week on privatisations and reforming Value Added Tax when he shook up his negotiating team to sideline outspoken Finance Minister Yanis Varoufakis, who will represent Athens at next week’s crucial Eurogroup meeting. “There is more competence, more willingness to compromise and more preparedness – data, numbers, etc,” said an EU official familiar with the talks. But to say there would be a deal by May 11 would be “speculation”, the official added. Greek daily Kathimerini said the ECB would consider this week significantly toughening the terms on which the banks receive emergency liquidity from the Greek central bank by raising the “haircut” on the collateral they present for funds.
Options under consideration involved reducing the face value of debt securities by 44, 65 or even 80 per cent, compared to the current 23 per cent, the newspaper said.