Greece and its lenders resumed technical talks on Saturday with the aim of drawing up a list of reforms that could pave the way for Athens to receive bailout funding but with little prospect of that happening this month.
A European official told Sunday’s Kathimerini that it is questionable whether the two sides will be able to agree by the Eurogroup meeting on May 11, let alone the one that will be held in Riga on April 24.
As the technical discussions began on Saturday in Paris, the government in Athens found itself in two minds over how to proceed. Sources said Athens would offer to hold back from passing any laws, such as ones on labor regulations, that could upset lenders in return for creditors not demanding from the government reforms, such as further labor liberalization, that it rejects.
However, there is little chance of this offer forming the basis of the agreement so the government has begun considering whether it will have to give in on some of the key differences with lenders, such as increasing value-added tax and proceeding with privatizations in order to secure a deal that would lead to the disbursement of enough cash to keep Greece from defaulting over the next couple of months.
There is another school of thought within the government that favors Athens sticking to its guns on the issues it regards as “red lines” – pension reform, labor market liberalization, VAT hikes and privatizations. Some key members of the government believe that the lenders will seek a compromise at the last minute despite their tough stance now.
The message from Washington, where Finance Minister Yanis Varoufakis met Treasury Secretary Jack Lew on Friday, was for Athens to strike a deal with creditors as quickly as possible. Lew warned that no agreement between the two sides “would create immediate hardship for Greece, and uncertainties for Europe and the global economy more broadly.”
Lew urged Athens to play a full part in the technical work that needed to be done to reach common ground. “I believe that the kind of detail that’s needed requires going literally through every line in your budget,” he said. “This isn’t resolved by speeches, it isn’t resolved by rhetoric, it’s resolved by the hard technical work.”