Eurozone finance ministers will not set any deadline for Greece to come up with reforms to get more funding because such time limits lead to brinkmanship in negotiations, a senior eurozone official said on Tuesday.
Greece, which is quickly running out of cash, pledged to its eurozone partners in February that by the end of April it would agree with creditors on a comprehensive list of reforms to get 7.2 billion euros remaining from its bailout.
Eurozone officials had expected the list to be presented to eurozone finance ministers this Friday in Riga. This would allow for a faster disbursement of cash to Athens, helping the debt-laden country avoid default on loan repayments on May 12.
But no package will be ready by then and it is also unlikely it will be ready by the end of the month. This is mainly because in the past weeks Greece has not been providing the creditors with the financial data they seek or saying clearly what reforms it plans.
Greek Prime Minister Alexis Tsipras will meet German Chancellor Angela Merkel at a European Union summit on migration on Thursday and the two are expected to discuss the funding crisis.
Speaking in Vienna, European Commission President Jean-Claude Juncker urged Greece to step up efforts to strike a deal with its, warning that talks were not advanced enough to find a quick solution.
A senior eurozone official involved in the talks said there had been some improvement in negotiations very recently, but not enough for a deal.
“There is a clear pick up in activity, there is a clear pick up in engagement, but we are a significant way away from a signal that a result is in sight,” the official said.
“(But) the use of deadlines, which leads to certain brinkmanship and unnecessary excitement, will not be done again.”
In a sign of how extreme the financial constraints have become, Athens on Monday ordered state entities, ranging from municipalities to a fund meant for future generations, to park idle cash at the central bank.
The official said such a step would help Greece’s liquidity.
“With the decree that was passed yesterday the situation, within the limits that there are, is well manageable,» he said.
But reaching an agreement with creditors on a comprehensive package of reforms by the end of April was unlikely, despite one more week left after the Riga meeting.
“If you want to present some kind of comprehensive agreement to the authorities and the institutions, analyse it, send it to the Euro Working Group to work on it, which then filters out the political questions for the Eurogroup to debate, it will be extremely difficult to keep the deadline of April 30,» he said.
The problem was not ideological differences between Tsipras’s left-wing government and the euro zone, but rather lack of information.
“I do not see any ideological fights,» the official said.
“We need to know exactly what out of the whole programme are the 70 percent which Greece has said was acceptable, or which are the 30 percent that are not, and once we have a firm picture of that, we can start discussing that,» the official said.
“We are not there yet, and if there ever were to be such a ‘fight’, the preconditions for it have not been created,» he said.
The bailout and the financing it offers expires on June 30.