Greece, lenders set to miss deadline for rescue loan deal
March 09, 2014 - 12:28:34 am
ATHENS: Greece and its international lenders will miss a self-imposed March 10 deadline to clinch a deal that will release the next tranche of the country’s rescue loans, three senior Greek government sources said yesterday .
Greece and representatives of the European Union (EU) and the International Monetary Fund (IMF) had hoped to conclude the latest review of the country’s reform progress under the terms of its international bailout by tomorrow, when eurozone finance ministers meet in Brussels.
But the talks will not be over by then because the two sides are still at odds over a range of issues, mainly on structural measures to boost the economy’s competitiveness and over Greek lenders’ capital needs. “The distance between us has narrowed but we will still have work to do next week,” one Greek senior government official told reporters after a new round of talks with lenders.
Greece’s ongoing review has been dragging on since September, making it the longest ever since the country’s ¤237bn bailout began in 2010.
Austerity-weary Athens has become increasingly defiant towards its lenders, who on their part are pushing for reforms as the bailout is nearing its end. Greece has already obtained ¤218bn of rescue loans but may need further funds to stay afloat.
Another two senior finance ministry officials said that the heads of the EU/IMF mission will return to Athens shortly after tomorrow’s finance ministers’ meeting, with a view to clinch the deal by the end of March.
Greece has no pressing funding needs before May, when ¤9.3bn of its bonds expire, the biggest refinancing hump the country will face in the next three decades.
“We’re on a very good road for an agreement,” one of the two finance ministry officials said. Greece is hoping to get eurozone finance ministers tomorrow to make a statement that the talks have made good progress.
To ease the talks’ completion, Greece has proposed removing the thorny issue of banks from the current talks. One of the officials said he was optimistic that the issue would not block a deal.
“I am confident it will not be a problem for the review,” the official said. The EU/IMF believe that Greek banks’ have higher capital needs than a ¤6.4bn estimate announced by Greece’s central bank on Thursday.