Greece hasn’t made enough progress in its talks with euro-area authorities to seal a deal by this week’s leaders’ summit in Riga, Latvia, according to two European officials familiar with negotiations.
Furthermore, any efforts by the European Commission to broker a compromise won’t succeed unless the International Monetary Fund is fully on board, said two other European officials. All asked not to be named because talks are ongoing and private.
Those pessimistic views contrast with reports from Athens that talks are moving closer to a deal. Prime Minister Alexis Tsipras said Monday night in televised remarks that the bailout discussions are in the final stage. The accord should include a writedown and restructuring of Greek debt, looser budget targets and protection for wages and pensions, he told a business event in Athens.
“We are willing and we have proved that we are ready to offer concessions to our European partners,” Tsipras said, providing the agreement isn’t just a short-term financing fix, but addresses the longer-term financing problems Greece will face until it regains market access.
Greece hopes to conclude a technical agreement with creditors at a Brussels Group meeting on Tuesday, with the aim of reaching political approval at the May 21-22 summit, government spokesman Gabriel Sakellaridis told reporters Monday in Athens.
European Commission President Jean-Claude Juncker is “personally involved” as the Greece talks continue, commission spokesman Margaritis Schinas told reporters in Brussels on Monday. He declined to comment on specifics or whether a deal by the Riga summit was possible.
“The commission is actively involved in the negotiations and we want to help,” Schinas said. “Whatever happens in Riga cannot be a substitute of the need that there is to bridge the gaps on the last remaining issues.”
A spokesman for the IMF declined to comment.
Greek shares fell by as much as 2.7 percent on Monday before rebounding to close 1.6 percent higher. The Athens Stock Exchange has fallen 24 percent in the past year, making it one of the worst performing primary equity indexes tracked by Bloomberg. Yields on Greece’s $2.1 billion of 3.375 percent bonds due 2017 rose 308 basis points, or 3.08 percentage points, at the close of trading for primary Greek dealers.
To Vima newspaper reported that the Brussels-based commission proposed a June disbursement of funds remaining in Greece’s aid package, alongside proposed new targets for fiscal actions and a more lenient primary budget surplus. Commission spokeswoman Annika Breidthardt said she’s not aware of the report and that talks continue to seek a comprehensive deal.
Greece has only “very limited” time left to secure an agreement from creditors on its economic plans, European Commissioner for Economic Affairs, Pierre Moscovici, said on Monday.
Tsipras has said he’s not considering a Greek withdrawal from the currency bloc and is focused on getting the aid the country needs to avoid a default. Tsipras will have a chance this week to make his case to German Chancellor Angela Merkel and other EU leaders on the summit sidelines, as this week’s meetings will be focused on relations with Ukraine and other countries on the EU’s eastern borders.
Europe’s most-indebted state is struggling to resolve talks with its creditors over the terms attached to its 240 billion-euro ($273 billion) bailout. Uncertainty over the country’s future in the euro area has triggered a liquidity squeeze, pulling the economy into a double-dip recession.
(An earlier version of this story corrected stock prices in the seventh paragraph.)