Published: Wed, May 24, 2017
Money | By Armando Alvarado

Greece Fails to Reach a Deal Over Fresh Bailout Funds

Greece Fails to Reach a Deal Over Fresh Bailout Funds

The same countries, however, oppose a firm commitment of debt relief for Greece, fearing the disapproval of bailout-weary voters at home.

The next tranche of Greek bailout funding remains in deadlock, despite the Greek parliament last week approving fresh austerity measures in order to appease the nation's creditors.

Even though euro-area governments committed past year to a laundry list of potential measures to ease repayment terms on Greek bailout loans after 2018, the degree to which these measures will be implemented is still a subject of contention.

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"The expectation is that we can reach an agreement within the next three weeks", said Greek Finance Minister Euclid Tsakalotos.

The Brussels-based meeting was aimed at deciding whether Greece had done enough to receive a €7.5bn (£6.4bn; $8.3bn) loan plus debt relief.

"The IMF has asked for more clarity... on how far that could go and what that could look like, so that's what we will look at today", Dijsselbloem said. "We've always said the final concrete decision on extra debt relief measures will come at the end of the program, which will be next year".

Greece is part way through its third bailout deal, worth €86bn.

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While hailing recent progress the Greek authorities have made to implement the reforms and cuts demanded from creditors, Mr Dijsselbloem said certain issues still needed to be addressed.

Led by the tough negotiator Christine Lagarde, the International Monetary Fund says Greece's debt is unsustainable and will be "explosive" in the long run, requiring a more ambitious plan from Europe.

The European Commission (EC) and the European Central Bank (ECB) will also inform the ministers of the results of the latest review of the bailout of Spanish banks, which took place on April 26 and 27, Efe news reported.

However, Germany and the Netherlands, among other creditors, have consistently stated they will not keep bailing out Greece if the International Monetary Fund pulls out.

Prime minister Alexis Tsipras is redoubling his push to reduce his country's debt burden after the economy fell back into recession unexpectedly at the start of the year.

A spokeswoman for Schaeuble's conservative-led finance ministry said that everybody wanted a solution "in the interest of Greece", adding it was up to euro zone finance ministers to find a solution during their talks in Brussels. Moreover, the German government, one of the most prominent sponsors of the relief package for Greece, does not yet have an internally coordinated vision of the prospects of the Greek bailout.

Greece's debt mountain stands at a towering 180 percent of annual output, the legacy of a crisis that brought panic to the markets and almost forced the country out of the euro. Analysts say the main reason why Greece has taken a step back is its stalled bailout negotiations.

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