Deal appears distant amid deadlock in reform talks

With negotiations between Greece and its creditors effectively deadlocked, a potential deal that could unlock crucially needed funding appeared more distant than ever on Thursday with doubts appearing about whether an agreement can be reached in time for a Eurogroup planned for May 11, well after the next scheduled eurozone finance ministers’ summit in Riga next Friday, which had been the original deadline.

Even representatives of the European Commission, which has been Greece’s closest ally in the talks, appeared to be losing their patience. In comments on Thursday spokesman Margaritis Schinas said the EC was “not satisfied” with the level of progress in talks and called for work to “intensify” ahead of next week’s Eurogroup summit.

Sources indicated that the so-called Brussels Group, comprising officials from the government and Greece’s creditors, was to convene in the Belgian capital on Saturday. But a European official told Kathimerini he had no such information and that talks were likely to resume on Monday. The aim is for that meeting to yield a detailed list of reforms that could form the basis for a staff-level agreement and potentially lead to the disbursement of much-needed aid.

But the two sides remain far apart. In a statement to Reuters on Thursday Tsipras highlighted several points of agreement – on areas such as tax collection, corruption and redistributing the tax burden – but also conceded that the two sides disagreed on four major issues: labor rules, pension reform, a hike in value-added taxes and privatizations, which he referred to as “development of state property” rather than asset sales. Despite the differences and “the cacophony and erratic leaks and statements in recent days from the other side,” Tsipras said he was “firmly optimistic” his government would reach an agreement with its creditors by the end of April. “Because I know that Europe has learned to live through its disagreements, to combine its parts and move forward.”

Finance Minister Wolfgang Schaeuble, who has leveled some of the harshest criticism against Greece in recent days, indicated that creditors remained ready to help but expected concessions. “If Greece wants support, we will give this support as in recent years, but of course within the framework of what we agreed,” he told Bloomberg. “Whatever happens, we know that Greece is part of the European Union and that we also have a responsibility for Greece and we will never disregard this solidarity.”

In a speech at the Brookings Institution in Washington on Thursday, Schaeuble said Greece was welcome to seek other sources of funding but might have difficulties. “If you find someone else, whether it’s in Beijing, in Moscow, in Washington DC, or in New York who will lend you money, OK, fine, we would be happy. But it’s difficult to find someone who is lending you in this situation amounts [of] 200 billion euros.” He added that Greece must seek to boost competitiveness and its primary surplus.

Addressing the same forum later in the day Greek Finance Minister Yanis Varoufakis appeared to stick to his guns. “We have the right to be heard, and we have the right to challenge the logic of a program that has clearly failed,” he said, maintaining that austerity had spawned a “monster of a crisis” and a “humanitarian emergency” in the country. He denied that Athens was impeding the progress of negotiations. “Our government is keener than anyone to bring negotiations to a successful conclusion,” he said. Earlier Varoufakis met with International Monetary Fund chief Christine Lagarde for talks that took place in an “excellent climate and with a mutual desire for cooperation,” according to Finance Ministry sources who said the two sides “agreed to improve their communication” leading up to next Friday’s Eurogroup. Lagarde played down speculation earlier in the day about the possibility of Greece delaying debt repayments, saying she did not regard it as an advisable move.

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