Greece fails to reach initial deal on reforms with lenders

Greek Prime Minister Alexis Tsipras, right, and Finance Minister Yanis Varoufakis are shown at the Greek parliament in Athens.
Alkis Konstantinidis | Reuters

Greece failed to reach an initial deal with the European Union and the IMF to unlock aid after the creditors dismissed a package of reforms from Athens as ideas rather than a concrete plan, officials said on Tuesday.

The lack of a deal further raises pressure on Athens, which faces the prospect of running out of money in a few weeks unless it can convince lenders to dole out more financial help.

Athens put a brave face on the failure to reach an agreement with the "Brussels Group" of representatives from the EU and the IMF, saying it remained keen for a deal on the basis of its long-held demand that the measures it is asked to implement do not hurt economic growth. Lenders will intensify efforts to collect data in Athens, it said.

One source close to the talks said the halt in negotiations was not a sign of a rupture but an indication of slow-moving progress in the discussions.

Greece to lurch from one crisis to another?
Greece to lurch from one crisis to another?

Mistrust and acrimony have characterized much of Greece's talks with lenders since Prime Minister Alexis Tsipras stormed to power in January pledging to end austerity and a bailout program that has kept Greece afloat for over four years.

Greece and its European partners have sought to show publicly that relations have improved in recent weeks after Tsipras held a series of talks with EU leaders, but both sides remain far apart on issues ranging from pension reform to debt relief.

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At issue now is a list of reforms that Greece presented to the Brussels Group representatives last week, in an effort to show lenders that it is committed to living up to pledges of financial discipline and is worthy of aid.

But euro zone officials panned the list as inadequate. One EU official said the lenders had yet to receive the list they had been waiting for.

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Risk Greece won't have long-term solution: Expert

A conference call of the Euro Working Group - euro zone deputy finance ministers - remains scheduled for Wednesday and will allow the bloc to take stock of developments so far, an official said.

"We obviously look forward to receiving a list as soon as possible," the official said. "That's the aim of the ongoing discussions: to exchange information on detailed reform measures and intentions."

The Brussels Groups makes recommendations to the Euro Working Group which in turn informs the Eurogroup of euro zone finance ministers who make decisions to disburse aid.

Tsipras appealed on Monday for an "honest compromise" with lenders but warned it would not be won at any cost.

Calling for support from opposition parties, Tsipras reiterated that his government would implement a Feb. 20 deal struck with the euro zone.

But he also stressed that the government had non-negotiable "red lines" such as avoiding wage and pension cuts and mass layoffs, and avoiding a fire sale of asset sales in favor of concessions that allows the state to retain control.

Separately, Greek Finance Minister Yanis Varoufakis met on Tuesday with officials from major bond fund manager Pimco, which has large investments in euro zone peripheral debt. Pimco officials expressed interest in Greek Treasury bill auctions and bonds, a finance ministry official said.