Greece, EU to continue talks as debt payment looms

Greece and the EU said Thursday debt talks would continue to reach a deal on disputed reforms as Athens began to feel the heat of a wave of June debt repayments.

With over 300 million euros ($336 million) due to be repaid to the IMF on Friday, the radical left Greek government was under mounting pressure to reach a default-saving agreement with its creditors.

The Athens stock exchange on Thursday opened with a three-percent drop after Greece and its creditors failed to reach a breakthrough at crunch talks in Brussels late on Wednesday.

However, anti-austerity Prime Minister Alexis Tsipras and European Commission chief Jean-Claude Juncker held out hope by saying they would meet again soon.

“The talks will continue in the coming days,” said Tsipras, whose hard-left Syriza party was elected in January on promises to end five years of painful austerity measures that plunged Greece into recession.

He added that after months of often bad-tempered talks between Athens and its creditors, “there was proof from the Commission that it is at least disposed towards reaching a realistic agreement very quickly.”

And on Thursday Juncker told a committee hearing at the European Parliament that he had had “long, challenging discussions and negotiations with the Greek prime minister.”

But he added: “This is the reason why I have to leave (the hearing)… We have to prepare the next round of negotiations,”

Greek media said the government was hoping for a deal by June 14.

Athens has the money to pay the International Monetary Fund on Friday, a source with knowledge of the matter told AFP, but added that the government would ultimately decide whether to make the payment.

Agreement on a reform plan would unlock the final 7.2-billion-euro ($8.0-billion) tranche of Greece’s bailout.

Tsipras’s government presented a 46-page blueprint on how to overhaul the struggling Greek economy without resorting to harsh austerity measures and cuts.

But the creditors put forward a rival plan hammered out without Greece at a meeting in Berlin on Monday attended by the leaders of Germany and France.

The Greek premier early on Thursday said that there were “points that no one would consider as a base for discussion” in the talks and that Greece’s reform plan “remains the only realistic plan on the table”.

– ‘Good, constructive meeting’ –

Eurogroup chief Jeroen Dijsselbloem, who also attended the four-hour talks over dinner in Brussels Wednesday, told reporters it was a “very good meeting”.

The European Commission — the executive arm of the 28-member European Union and one of Greece’s three bailout monitors along with the IMF and European Central Bank — said in a statement that there had been “progress” during the talks.

“It was a good, constructive meeting. Progress was made in understanding each other’s positions on the basis of various proposals. It was agreed that they will meet again,” it said.

Senior eurozone officials are due to hold a teleconference later Thursday, officials told AFP. Many EU leaders will also be in Brussels for a Latin American summit next Wednesday and Thursday.

Fears of a messy Greek exit from the euro are growing, with its current 240-billion-euro bailout programme due to run out at the end of June, and a total of 1.6 billion euros in payments due to the IMF this month.

– Syriza challenge –

In the hours before the Tsipras-Juncker meeting Wednesday there were frantic efforts to bridge the gap between the demands of the creditors and the hard-left Syriza government’s determination to end austerity measures.

German Chancellor Angela Merkel and French President Francois Hollande acknowledged “the necessity” to lower primary surplus targets — a key sticking point with Athens — during phone talks on Wednesday with Tsipras, Greek sources said.

Athens has insisted on lower targets that would allow it to honour promises to voters to increase public spending, having already made compromises on pension reform and sales tax.

Any deal that does eventually emerge faces a major hurdle as the reforms would have to be approved by the Greek parliament.

This could be tough given that Tsipras is under intense pressure from Syriza’s influential radical wing to reject any plan that piles more austerity on the recession-hit country.

Some Syriza officials have said they would rather hold snap elections than accept more austerity.