Greece said Friday that the deadline for reaching an accord to release much-needed bailout funds was the end of June, despite officials raising hopes of a deal being imminent as it flirts with the possibility of a default.
Finance Minister Yanis Varoufakis told VimaFM radio that under a February agreement “the country’s aid program was prolonged until June 30, thus that it is the date by which we need to arrive at a deal.”
After four months of negotiating to unlock some 7.2 billion euros ($7.9 billion) in bailout cash with creditors — the International Monetary Fund, the European Union and the European Central Bank, Athens’ coffers are near empty.
The Greek government under Prime Minister Alexis Tsipras has consistently stressed the urgent need for a deal, with Interior Minister Nikos Voutsis warning last week that Athens had “no money” to make a series of repayments to the IMF that are due beginning June 5, totaling 1.6 billion euros
If Varoufakis sees the end of June as the ultimate deadline for a deal, this would offer Athens and its creditors a longer time frame to conclude their talks.
With fears that a payment default could trigger a chain of events that could result in a messy exit from the euro, Greek officials have in recent days signaled they are hopeful a deal could be reached by Sunday, although its creditors are more skeptical.
The EU Commissioner for Economic and Monetary Affairs, Pierre Moscovici said on Thursday that a deal was “possible” but a great deal of work still needed to be done.
Varoufakis also said a deal was close, but did not mention that it could be reached over the weekend.
“We are close to concluding the negotiations, there will be an agreement soon,” he said, adding there was a consensus “on the majority of questions.”
Tsipras’s radical left SYRIZA party swept to power in January on an anti-austerity platform, and has been reluctant to sign up to more tax hikes and spending cuts that the creditors have been demanding in exchange of bailout loans.
Varoufakis lashed out at the EU and IMF for insisting on austerity policies “that are disastrous for the Greek economy” and Europe.
He said the deal would include reforms on the labor market, social benefits and public debt.
Greece’s economy contracted by a quarter before returning to growth last year as government finances stabilized.
However, the political uncertainty triggered by the elections and SYRIZA’s clash with Greece’s creditors led to a new recession, with the economy contracting by 0.2 percent in the first quarter of this year.