Deal with creditors delayed by politics, says EU official

The delay in concluding the review of the current Greek bailout is due to hesitation over political decisions that need to be made for a technical-level agreement between Athens and its creditors, a European official said on Tuesday, ahead of Friday’s meeting of eurozone finance ministers.

“The institutions are in a position to draft a technical agreement fast, but it is the political decisions that need to be taken which are causing the holdup,” said the official, who spoke on the condition of anonymity.

Referring to a meeting taking place on Tuesday in Brussels between representatives of Greece’s creditors and the Greek ministers of Finance Euclid Tsakalotos and Labor Efi Achtsioglou, and Tsakalotos’s alternate, Giorgos Houliarakis, the same official said that a breakthrough is not expected. It could “mark an important step but there are no magical solutions,” he said.

The official was referring to the two key sticking points in the negotiations: pension and labor reforms, which the left-led government is keen to avoid as it sees its popularity flagging among an austerity hit electorate. The partial privatization of Public Power Corporation, part of demands for the liberalization of the energy market, has also emerged as a divisive issue, testing the coalition government’s unity.

Time is running out, the official warned, as Greece faces bond payments of more than 7 billion euros in July. He said the Easter holidays will likely cause a further delay in the talks, which may be additionally complicated when negotiators head to Washington next week for the International Monetary Fund’s Spring Meetings.

“Many think that all sorts of discussions can take place over there, but that’s the kind of thing only people who aren’t present believe,” the official stressed. “You can’t have any discussion you want; the schedule of meetings is very tight and strictly predetermined.”