Greece Fails to Reach a Deal Over Fresh Bailout Funds

Greece's worldwide lenders failed to reach a deal on Monday on additional debt relief measures for Athens after an 8-hour meeting in Brussels, the head of the eurogroup of eurozone finance ministers said.

The standoff came just hours after France and Germany pledged to deepen co-operation in the single currency and seize Brexit opportunities for their banking industries.

Despite another round of marathon talks yesterday, Greece's creditors failed to agree on fundamental elements of the country's bailout programme.

The IMF, which has sought debt relief for Greece, has stayed away from the latest bailout as it seeks assurance from the European Union regarding the sustainability of the country's massive debt pile.

The head of the Eurogroup of finance ministers, Jeroen Djisselbloem, said ministers hope to reach a deal at the next meeting on June 15.

The IMF has pressed the euro zone for more detail on actions it could take, if necessary, to contain Greece's gross financing needs, based on a May 2016 declaration.

Tuesday's deal included the approval of the next batch of bailout money, but also an agreement on the sort of debt relief measures Greece can expect to get when its current bailout programme ends next year.

Diplomats said that, although ministers held in-depth talks on maturity extensions for bailout loans, and other options for debt easing, more time would be needed to conclude a deal.

At the heart of the dispute is a demand that Greece run a budget surplus equivalent to 3.5% of GDP.

The IMF didn't see the draft proposals presented on Monday as explicit enough for the Fund to immediately resume co-financing of the lifeline keeping Greece afloat since 2010, the people familiar with the discussions said.

The eurozone and the International Monetary Fund agreed on Monday that Greece would have to keep a primary surplus - the budget balance before debt servicing - at 3.5 per cent of GDP for five years after the bailout ends in 2018.

"Both are possible and both should be done".

Dijsselbloem said the International Monetary Fund welcomes the progress made by Greece, and is "impressed" by the reforms undertaken by Greece and that it stands ready to go to the board to get involved financially.

"The last details still have to be worked through now", said Luxembourg Finance Minister Pierre Gramegna. Bruno Le Maire and Wolfgang Schäuble flew to Brussels in the same plane, after a press conference in Berlin where they announced a working group on eurozone reform. This should not "fail because of German resistance", he said. "This means jobs, work, and wealth for our countries".

  • Zachary Reyes