Ministers hope for progress as ‘difficult’ Greek debt talks resume

Eurogroup ministers gathering in Brussels hope for progress as “difficult” Greece negotiations resume and the European Union’s president cancels a planned summit of all 28 EU leaders that would have been needed in case of a “Grexit”.

BRUSSELS, BELGIUM (JULY 12, 2015) (REUTERS) – Eurogroup finance ministers resumed on Sunday (July 12) a meeting suspended after nine hours of acrimonious debate on Greece’s application for another three-year loan on the basis of reform proposals Greek Prime Minister Alexis Tsipras accepted after long resisting.

It would be Greece’s third bailout programme.

Several hardline countries voiced support for a German government paper that recommended Greece take a five-year “time-out” from the euro zone unless it accepted and implemented swiftly much tougher conditions, notably by locking state assets to be privatised in an independent trust to pay down debt.

Argument became so heated that Eurogroup chairman Jeroen Dijsselbloem decided to adjourn at midnight and resume talks at 11 a.m. to allow tempers to cool.

Finland Finance Minister Alexander Stubb said on Saturday the Greek proposal was not sufficient to start negotiations on a new loan. Arriving on Sunday, Stubb said he wanted more guarantees from Greece.

“No-one is blocking a deal, we are all constructively trying to find a solution in a very difficult situation. What we are saying is that the conditionality that has been presented by the Greeks is simply not enough at this stage. We need to have clear commitments, clear conditionality and clear proof that those conditions will be implemented at the end of the day, that’s pretty much where we stand,” Stubb said.

Helsinki’s stance has hardened since the populist Finns Party joined a right-wing coalition that took office in May.

Euro zone leaders will meet later in the day to try and keep near-bankrupt Greece in the euro zone.

European Commission Vice-President Valdis Dombrovskis, who is in charge of the euro in the EU executive, doused Greek hopes of an immediate agreement on Sunday to start loan negotiations.

“I think it’s relatively unlikely the European Commission will get a mandate to start formal negotiations as regards a third programme or ESM (European Stability Mechanism) programme today. But I think the Eurogroup can prepare and provide input for discussions of leaders later today,” he said.

A summit of 28 EU leaders that would have been needed in case of a “Grexit” was cancelled.

The finance ministers agreed in principle to seek ways to ease Greece’s debt burden by extending loan maturities and other steps stopping short of a “haircut” or writedown, provided Athens first implements key reforms of taxation, pensions, labour markets and public administration.

In return of a new loan, leftist Prime Minister Alexis Tsipras will be required to enact key legislation in parliament on Monday to start restoring the broken trust of his partners in the 19-nation currency union to win a third bailout, ministers said.

A draft statement by the Eurogroup discussed late on Saturday and seen by Reuters listed a series of additional commitments Greece would have to make just to start loan talks.