Slow progress on Greek reforms, May 9 deal unlikely, say sources

Talks on concluding Greece’s bailout review to unlock new funds and debt relief are progressing only slowly and no deal is likely at a special meeting of eurozone finance ministers on May 9, two sources close to the talks said on Monday.

The sources said it would take longer to reach a deal on reforms needed to complete the review of Greece’s third international financial rescue and agree on contingency steps that Athens must ready in case it misses its fiscal targets.

“We’re making slow progress,” one of the sources said. “I wouldn’t expect a final agreement at the May 9 meeting. That’s too soon. There are some weeks to go after that.”

The biggest remaining obstacle is the form and content of the contingency measures, which Greece is resisting, he said.

The source said it would be preferable to wrap up an accord before Britain’s June 23 referendum on whether to stay in the European Union to avoid any atmosphere of crisis at that time.

However, he said Greece did not need the next tranche of eurozone funds until mid-July, so there was no sense of overwhelming urgency.

The second source said more time was also needed to bridge the gaps between the International Monetary Fund and European lenders on a debt restructuring for Greece, with Germany – the biggest European creditor – arguing publicly that Athens does not need debt relief.

The chairman of eurozone finance ministers, Jeroen Dijsselbloem, last week called an extraordinary meeting of the Eurogroup for May 9 amid reports that an agreement was close.

European Economics Commissioner Pierre Moscovici told reporters then: “We are 99 percent of the way there, we have converged on almost all aspects,” referring to the basic reform package. But he added that more work was needed on the contingency steps.

[Reuters]