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Greece and Brussels ‘a breath away’ from deal

Greece and Brussels ‘a breath away’ from deal

By: Jim Brunsden in Brussels and Mehreen Khan in London

Greek prime minister Alexis Tsipras said Athens was nearing a deal with creditors on the next stages of its international bailout programme, at the same time warning that euro area leaders may need to step in if an accord is not wrapped up in the coming days.

Negotiations in Brussels between Greek ministers and bailout monitors had left the parties “just a breath away from reaching an agreement” on pensions cuts and labour market reforms, Mr Tsipras said on Wednesday. Athens must undertake the reforms to unlock more bailout aid.

But he suggested a summit of eurozone leaders could be needed this month to break the deadlock if an accord were not finalised soon, stressing that “this endless negotiation must come to an end”.

Jeroen Dijsselbloem, the president of the eurogroup of finance ministers, and other negotiators had sought to conclude a deal ahead of a meeting of EU finance ministers on Friday in Malta. People involved in the talks now expect further discussions to take place in Malta.

But Tsipras warns eurozone leaders may need to step in if accord is not wrapped up

An agreement would be a key stepping stone towards getting the International Monetary Fund on board as a financial partner in the bailout, something Germany says is essential if Athens is to receive further tranches of aid.

Athens and its creditors are trying to secure a deal ahead of a series of large debt repayments, totalling more than €6bn, that Greece must make in July.

Greece this summer will pass the second anniversary of its third international bailout programme since Athens teetered on the brink of default in 2010. After a crisis that saw the country again flirt with leaving the euro in the summer of 2015, EU policymakers have patched together a working relationship with the country’s Syriza government in a bid to put the country back on a sounder economic footing.

Brussels officials fear that the ongoing wrangling over further reforms risks creating a vicious spiral by undermining investor confidence, in turn denting the economic recovery.

Pierre Moscovici, the EU’s economy commissioner, told the European Parliament on Tuesday that a rapid agreement was “imperative”, with a risk that delays would damage Greece’s public finances.

“The Greek people have suffered a lot and need to see the light at the end of this long tunnel of austerity,” he said.

Officials are aware that even after a deal has been reached on a reform package, further difficult terrain will have to be crossed before the IMF will consider joining the bailout, including politically thorny discussions on debt relief.

Speaking alongside Mr Tsipras on Wednesday in Athens, Donald Tusk, the president of the European Council, also urged a swift resolution to the talks, which were meant to be concluded last year.

“This is the only positive result for Greece and for the whole community,” he said. “We are really close to this agreement.”

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

https://www.ft.com/content/7216c77e-19bb-11e7-9c35-0dd2cb31823a

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