Troika talks prolonged

No final deal reached on Saturday; negotiations to continue after Eurogroup

Greece is to resume talks with the troika after Monday?s meeting of eurozone finance ministers in negotiations that may last another two weeks despite both sides noting progress on Saturday.

Finance Minister Yannis Stournaras met with officials from the European Commission, European Central Bank and International Monetary Fund for more than three hours on Saturday but said that talks would have to continue next week as there was no final agreement on the details of the 13.5-billion-euro austerity package demanded by Greece?s lenders.

?The talks will go on as there is some divergence on certain issues,? said Stournaras after meeting Prime Minister Antonis Samaras on Saturday. He insisted that the differences that needed to be bridged were fiscal rather than political.

?There are no political solutions to be sought; there are simply negotiations with the troika,? he said, adding that the visiting officials would also be at Monday?s Eurogroup meeting to brief finance ministers on the talks in Athens.

Greece is hoping that following the briefing, eurozone finance ministers will issue a statement confirming that there has been progress in the negotiations. Speaking in Riyadh on Saturday, IMF Managing Director Christine Lagarde said talks in Athens had been ?very good and productive.? EU Monetary Affairs Commissioner Olli Rehn said talks had ?moved on? and that an agreement might be just a matter of days away.

Stournaras is also set to present the outline of the package, which sees about 9 billion euros? worth of measures being implemented next year and 4.5 billion in 2014. The troika is likely to tell the Eurogroup that these measures will mean Greece will just about wipe out its primary deficit next year and that the target of a 4.5 percent primary surplus for 2014 will only be achieved in 2016. If the ministers do not approve this shift in targets then it is likely that the troika will return to Athens to demand further cuts. This would complicate negotiations and further delay the disbursement of Greece?s next loan tranche.

Meanwhile, ECB executive board member Joerg Asmussen dealt another blow to Greek hopes of rolling over the bonds held by the central lender. ?We can neither extend the maturities for Greek bonds nor lower the interest rates,? he told Bild newspaper. ?Both would be a form of debt relief and so direct financing of the Greek state, which the ECB is not legally allowed to do.?