Germany, Greece pessimistic on aid accord by deadline

1 billion euros due on may 12

AT HE NS • Greece and its creditors may not be able to complete preparatory work needed for an agreement on financial aid before euro-area finance ministers meet in Brussels next week, German Finance Minister Wolfgang Schaeuble said.

With about 1 billion euros (US$1.1 billion) of payments due to the International Monetary Fund by May 12, Schaeuble welcomed the newly “constructive” approach of Greek officials to the negotiations. He nonetheless warned that it may come too late to release aid at the May 11 gathering.

“The Eurogroup will take up these matters only on the basis of the comprehensive report by the institutions,” Schaeuble said at a press conference in Berlin Tuesday, referring to the European Commission, the European Central Bank and the IMF. “I’m rather skeptical that we can get there by Monday, but I’m not ruling it out.”

Euro-area finance chiefs are urging Greece to bow to their terms for releasing aid within days to avert a potential cash crunch. European officials are concerned that Greece may struggle to meet its obligations this month unless Greek Prime Minister Alexis Tsipras drops his opposition to cutting pensions and making it easier to fire workers.

Greece blamed international creditors for the failure to end the impasse over its fiscal crisis, clouding the outlook for talks that some officials had said were making progress.

No deal will be possible until the EC and IMF agree to a common set of demands, a government official said on condition of anonymity. Taken together, there are too many red lines and creditors need to better coordinate their message, the official.

IMF spokeswoman Angela Gaviria said in an e-mail that she had no immediate comment. A European Commission spokesman wasn’t immediately available for comment.

The remarks came as investors reined in their optimism that Greece would soon be in a position to clinch an agreement guaranteeing the flow of central-bank liquidity and bailout funds. Yields on two-year notes rose

151 basis points to 21 per cent, while the benchmark ASE stock index fell 3.9 percent at the close of the trading day in Athens.

Compounding the confusion, Greece’s latest comments came just as European Economic Affairs Commissioner Pierre Moscovici tweeted that progress was being made following a meeting with the Greek Finance Minister Yanis Varoufakis.

They also came minutes before a meeting between Deputy Prime Minister Yannis Dragasakis and European Central Bank President Mario Draghi in Frankfurt. “I just met Yanis Varoufakis about the significant progress of the Brussels Group and to prepare a useful Eurogroup on Monday,” Moscovici said.

Greece’s new line of argument fo-

Skeptical that we can get there by monday, but I’m not ruling it out

cuses on what it says are divisions among the international creditors. The IMF won’t compromise on labour deregulation and pension reforms, while the European Commission is insisting on fiscal targets being met, said the government official, who spoke on condition of anonymity because the talks are confidential.

While Greek officials say they’re confident of making payments to the IMF this week and next, one policy maker signaled last month that the country may struggle to keep its finances afloat beyond the end of May.