Greece seeks eurozone backing for reforms

Greece pushed Europe on Monday to back its reform plans and free up cash before a huge repayment to the IMF, but ministers meeting in Brussels warned there would be no bailout deal yet.

The eurozone’s 19 ministers meet in Brussels one day before Greece must pay a 750 million euro ($840 million) debt bill to the International Monetary Fund that some fear the Mediterranean nation cannot afford.

French Finance Minister Michel Sapin said on his way to Brussels that the talks “must show there is movement, but that more work is needed.”

“We have to show that things are advancing but they are not ready yet” for a deal, he added.

Eurozone ministers are so far unswayed by the threat of financial catastrophe in Athens and have ruled out imminent compromise to unlock the 7.2 billion euros still owed Greece under its 2012 bailout.

The bailout, the second since Greece’s debt crisis erupted five years ago, expires next month, putting huge pressure on Athens.

Led by Germany, the Europeans still expect a rigorous regime of reforms from Athens, but Prime Minister Alexis Tsipras’s leftist government in power since January has so far refused to deliver.

With no overall deal in sight, Greek officials laid out hope for a “positive statement” on Monday from the Eurogroup — the eurozone finance ministers — that will allow for the last tranche of the bailout to be paid.

The symbolic gesture would also help persuade the European Central Bank to keep emergency funds flowing to Greece’s fragile banks.

“We want a clear confirmation of the progress that has been made” in the talks, Tsipras told a marathon cabinet meeting late Sunday.

– Deal ‘not very close’ –

But European leaders were gloomier.

“We have made progress, but we are not very close to an agreement,” said Eurogroup chief Jeroen Dijsselbloem, who is also the Dutch finance minister.

“We need more time,” he said.

No one outside the Greek government knows for sure how long Athens can go without a deal to end Greece’s 240 billion euro bailout, which began in 2010 and expires at the end of June.

Athens faces a harrowing repayment schedule over the coming weeks.

In June alone, Greece owes another 1.5 billion euros to the IMF and it owes another three billion euros to the ECB in July and August.

Sources in Athens said the loan repayment due on Tuesday to the IMF will be honoured on schedule.

Greece has been squeezing funds from the central and local governments to be able to meet its payments, but mayors are beginning to resist.

“Experience elsewhere in the world has shown that a country can suddenly slide into insolvency,” Wolfgang Schaeuble, the powerful German finance minister, warned on Sunday.

– Frenetic diplomacy –

Greek officials went on a frenetic diplomatic offensive last week, with the Finance Minister Yanis Varoufakis making stops in Paris, Brussels, Rome and Madrid to drum up support for his beleaguered nation.

Tsipras spoke three times by phone to Europe’s most powerful leader, Germany’s Angela Merkel, and he repeated calls to Jean-Claude Juncker, the head of the European Commission.

“The government has done everything humanly possible, a solution is within sight as long as there is a political will on the side of the creditors,” Varoufakis said.

The former professor will represent for Greece at the Eurogroup, despite a flamboyant and outspoken style that has irked fellow ministers.

Varoufakis was thought to have been sidelined as negotiator after the last eurozone meeting ended sourly, but officials in Brussels are unanimous that a new team has calmed the waters.

Tsipras, whose Syriza party swept to power on an anti-austerity platform, has called for an “honourable compromise,” and the government reportedly plans a number of concessions to win over its creditors.

These include a new VAT rate, along with a restriction on early retirement and an unpopular property tax that would enable the government to save five to six billion euros as demanded by its creditors.

But since day one of these talks, bargaining has been complicated by conflicting messages from Athens on how much the government is prepared to compromise.

Euclid Tsakalotos, one of Greece’s main negotiators, said the thorniest topics “will remain open until the last minute”.