BRUSSELS (AP) — Greece appears to have made some progress in bailout talks with its European creditors but the chances of a deal on Monday look slim, finance ministers said ahead of another round of negotiations over the future of the country.
Greece, which is facing a cash crunch that could see it go bankrupt within weeks and possibly leave the euro currency, has to secure a deal on economic reforms and budget measures with creditors to get a bailout loan — worth 7.2 billion euro ($8 billion) — that will help it pay upcoming debts.
As they arrived for a meeting in Brussels, finance ministers from the 19-country eurozone said progress has been made since their last such gathering in April ended in acrimony. Germany’s Wolfgang Schaeuble even indicated he would not oppose Greece holding a referendum on the reforms proposed in an eventual deal.
Greece’s Yanis Varoufakis laid out the hope that a deal could be secured “within days” though his partners in the eurozone appeared more skeptical.
Most observers think the Greek government will make a 770 million euro payment due Tuesday to the International Monetary Fund, one of its main creditors, after it scraped together reserves from local governments and state entities like hospitals.
But Greece will increasingly struggle to meet other debt obligations and pay state wages and pensions as its economy is headed for another recession and it cannot borrow on international bond markets at affordable rates.
Without the bailout money, which has been withheld for months pending the discussions, Greece faces the prospect of defaulting on its debts, introducing controls on the free flow of capital and an exit from the euro. Despite three months of talks, Greece and its creditors have failed to agree on further reforms and savings Athens needs to qualify for the loan installment.
Greece hasn’t had any bailout money since last August and has relied on its own resources.
Ahead of the meeting, which will include representatives from the European Commission, European Central Bank and IMF, Varoufakis spoke with German Finance Minister Wolfgang Schaeuble, one of the toughest negotiators in the talks.
Several officials noted progress was being made, but also that time was pressing for a deal to be finalized.
“The time frame given to them was until the end of June,” Irish Finance Minister Michael Noonan said, referring to the date when Greece’s European bailout program expires. “The difficulty now is that people are getting concerned, including myself, about the liquidity situation in Greece and I hope that can be resolved.”
A lot more will remain to be done after Monday’s meeting and “time is passing,” he added.
Whether Greece will default on its debts and leave the euro is one of the biggest uncertainties surrounding the global economy. Most stock markets in Europe were trading lower Monday, with Athens’ main index down 2.5 percent.
Greece’s left-led government was elected in January on a mandate to end crippling austerity policies, blaming them for the parlous state of the economy. The budget cuts required in return for 240 billion euros worth of rescue loans contributed to a massive shrinkage in the Greek economy and the sky-rocketing of unemployment and poverty.
The Greek government has indicated it will reject any deal that doesn’t guarantee a credible prospect of ending its economic crisis. It has hinted at a possible referendum on any deal that runs counter to its electoral mandate.
Germany’s Schaeuble said a referendum “could be perhaps a correct step to let the Greek people decide.”
Back in 2011, Greece’s then prime minister, George Papandreou, floated the idea of a referendum on Greece’s bailout but was rebuked by his counterparts in Europe.
“The decision lies with Greece,” Schaeuble said. “We just want to help Greece, but Greece must do its part as well.”
LORNE COOK, Associated Press PAN PYLAS, Associated Press
Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
