German Commissioner Guenter Oettinger said on Monday (1 June) it might still be possible for Greece and its creditors to reach a deal this week.
“We will need progress at the working group level, in order that we can agree on a reform agenda, perhaps even by the end of the week, which would trigger the payment of the last tranche of aid from the current aid programme,” Oettinger told Die Welt.
Oettinger, however, downplayed expectations of any breakthrough at a meeting between German Chancellor Angela Merkel, French President Francois Hollande and EU President Jean-Claude Juncker in Berlin on Monday. “Greece’s challenges are too big to be solved ‘en passant’,” he said.
Athens and its creditors were continuing talks on a cash-for-reforms deal but were expected to miss a self-imposed Sunday deadline for reaching an agreement to unlock aid, sources close to the talks said.
Pressure to strike a deal has intensified as Greece faces a debt payment on June 5 as well as the expiration of its bailout programme on June 30.
Oettinger said the talks had moved forward when it came to reforms such as VAT, but said differences on central topics such as the labour market and the pension system were still too big.
Athens and its eurozone and International Monetary Fund (IMF) creditors have been locked in talks for months on a reforms agreement. Without a deal, Athens risks default or bankruptcy in weeks.
The pressure has intensified in recent days as Athens faces a payment to the International Monetary Fund on June 5 as well as the expiration of its bailout programme on June 30.
In a phone call on Sunday with German Chancellor Angela Merkel and French President Francois Hollande – the second in four days – Greek Prime Minister Alexis Tsipras pushed for a political solution for the country’s economic troubles.
“(The teleconference) took place in a very good climate,” a Greek official said, adding that all three recognised the need for a quick deal.
Tsipras has long sought a political push to end negotiations and get aid flowing to his cash-strapped country. But the lenders have insisted that Greece must wrap up talks at the technical level with adequate concessions on reforms so that its budget and debt numbers add up.
In a column published on Le Monde‘s website on Sunday, Tsipras said Greece should not be blamed for not yet reaching a deal with its creditors and called on fellow European leaders to bypass technical talks and come to a political solution.
“If we have not reached an agreement with our partners, it’s not because of our intransigence or incomprehensible positions from the Greek side,” Tsipras wrote.
“It is rather because of the obsession of some institutional representatives who insist on unreasonable solutions and are being indifferent to the democratic result of recent Greek elections.”
He said the Greek government had been ready to make compromises, for instance on privatisations, despite its ideological opposition to them.
Labour and pension reforms are believed to be among the big sticking points with Athens. Another source close to the talks said the major issues holding up a deal remained.
Deal in “a few days”
Earlier, a Greek government official speaking on condition of anonymity, said the two sides were “very close” to a deal but one was not expected on Sunday.
In an interview published in Corriere della Sera on Sunday, Greek Economy Minister George Stathakis said he expected a deal in “a few days”, followed by a meeting of euro zone finance ministers to approve disbursement of the aid.
Asked whether the 300 million euro payment to the IMF on 5 June was at risk and there was a question of lumping it together with other instalments that fall due next month, Stathakis said: “There shouldn’t be any need. No danger.”
Athens has frequently said it is on the verge of a deal in recent weeks but international lenders have been less optimistic, citing Greece’s resistance to labour and pension reforms that are conditions for more aid.
In a sign of greater willingness to compromise, Interior Minister Nikos Voutsis said on Saturday that Greece was open to pushing back parts of its anti-austerity programme to reach a deal this week.