Greece and lenders meet to explore their options

Talks between Greek officials and representatives of Greece’s lenders began in Brussels on Friday ahead of Monday’s Eurogroup, with the option of a new program, rather than an extension to the current one, being put on the table.

A European Union official told reporters on Friday that talks on extending the bailout would not be needed if a new agreement is secured. Kathimerini understands that European officials are examining the possibility of a new program being built around the 11 billion euros Greece has left in the Hellenic Financial Stability Facility (HFSF), which would mean Athens could meet its goal of not borrowing any further funds from its partners and the eurozone could also avoid the politically sensitive subject of having to provide more loans to the Greek government.

While the new program would come with conditionality, it would not have to be called a memorandum of understanding and could help the government in its effort to present it as something new.

This was not at the heart of discussions on Friday. The aim of the talks is to establish the reforms that each side will accept as part of any deal that could be struck at Monday’s Eurogroup or subsequent meetings.

Eurogroup chief Jeroen Dijsselbloem said he was “very pessimistic” about an agreement being reached on Monday.

“Greeks’ expectations of the Greek government are sky-high,” he added. “But the possibilities, given the state of their economy, are very limited. So that still needs a huge adjustment and I don’t know if we can figure that out as soon as Monday.”

The Greek team was led by the head of the council of economic advisors Giorgos Houliarakis. Representatives of investment group Lazard, which is advising Greece on the debt issue, were also part of the delegation. The Finance Ministry issued a statement on Friday saying that Lazard is not being paid for its services.

Greece’s lenders were represented by Rishi Goyal of the International Monetary Fund, Declan Costello of the European Commission and Klaus Masuch of the European Central Bank.

European officials said there had been no discussion about lowering Greece’s primary surplus target of 3 percent of gross domestic product so far.