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Greece, foreign lenders close in on deal to unlock aid

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By Reuters

Published: Sunday, July 7, 2013, 9:48 p.m.

ATHENS — Greece is likely to reach a deal with foreign lenders on its latest bailout review before a meeting of eurozone finance ministers on Monday to decide on further aid, EU and Greek officials said on Sunday.

Athens has been in talks with inspectors from the European Union, European Central Bank and International Monetary Fund “troika” for nearly a week to show it can deliver on its pledges after failing to meet public sector reform targets.

Greece hopes eurozone finance ministers will free its next $10.4 billion tranche of aid when they meet on Monday because it needs part of the money to redeem about $2.8 billion of bonds in August.

Bailed out twice by its foreign lenders, Greece relies on foreign aid to stay afloat. Failure to successfully conclude its bailout review could push it close to bankruptcy once again, triggering another surge in the eurozone crisis.

“We made very good progress,” said Poul Thomsen, head of the International Monetary Fund's mission to Greece, adding that he hoped talks would be concluded early on Monday before the Eurogroup meeting of finance ministers.

Greek Finance Minister Yannis Stournaras said he was optimistic of a deal on Monday morning. The two sides were due to leave Athens but could remain in touch to nail down final details.

The latest loan installment is one of the last big cash injections that Greece stands to get as part of a $307 billion rescue package that expires at the end of 2014.

EU Economic and Monetary Affairs Commissioner Olli Rehn said in France that the negotiations were almost complete, but Athens needed to intensify efforts to deliver on reform commitments.

“The ball is in the Greek court, and it depends on whether Greece is able to deliver the remaining elements of the milestones that have been agreed,” he said.

He reiterated that aid for Greece could be split into installments. Lenders have become increasingly frustrated with Greece's slow pace in shrinking the civil service and making it more efficient and less corrupt.

Talks with the troika stumbled last week over a missed June deadline to put 12,500 state workers into a “mobility scheme,” under which they are transferred or laid off within a year, but an agreement was reached on Saturday.

 

 
 


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