Greece, EU to continue talks as debt payment looms

Prime Minister of Greece Alexis Tsipras (L) walks with European Union Commission President Jean-Claude Juncker prior to their meeting at the European Union Commission headquarter in Brussels, on Jun 3, 2015. (Photo: AFP/Thierry Charlier)

ATHENS: Greece and the EU said on Thursday (Jun 4) loan talks would continue to reach a deal on disputed reforms as Athens began to feel the heat of a wave of June debt repayments.

European Commission head Jean-Claude Juncker said his officials were preparing "the next round of negotiations" after a four-hour meeting late on Wednesday with Greece's Alexis Tsipras.

"I was sleeping three hours after having had long challenging discussions and negotiations with the Greek prime minister," Juncker told a committee hearing at the European Parliament.

"This is the reason why I have to leave (the hearing) ... We have to prepare the next round of negotiations," he said.

With over €300 million (US$336 million) due to be repaid to the IMF on Friday, the radical left Greek government was under mounting pressure to reach a default-saving agreement with its creditors.

The Athens stock exchange on Thursday opened with a three-per cent drop and was down 2.06 per cent in midday trade.

"The talks will continue in the coming days," said Tsipras, whose hard-left Syriza party was elected in January on promises to end five years of painful austerity measures that plunged Greece into recession.

The 40-year-old leader added that after months of often bad-tempered talks between Athens and its creditors, "there was proof from the Commission that it is at least disposed towards reaching a realistic agreement very quickly."

Greek media said the government was hoping for a deal by Jun 14, although maverick Finance Minister Yanis Varoufakis - who does not always echo the cabinet line - told a radio interview the talks would conclude on Jun 30.

Athens has the money to pay the International Monetary Fund on Friday, a source with knowledge of the matter told AFP, but added that the government would ultimately decide whether to make the payment.

Agreement on a reform plan with Greece's creditors would unlock the final €7.2-billio (US$8.0 billion) tranche of EU-IMF bailout.

Tsipras's government presented a 46-page blueprint on how to overhaul the struggling Greek economy without resorting to harsh austerity measures and cuts.

But the creditors put forward a rival plan hammered out without Greece at a meeting in Berlin on Monday attended by the leaders of Germany and France.

The Greek premier early on Thursday said that there were "points that no one would consider as a base for discussion" in the talks and that Greece's reform plan "remains the only realistic plan on the table".

His party secretary Tassos Koronakis on Thursday said the creditors' proposals ignored the grave state of the economy after five years of austerity cuts.

"A proposal with 11 percent tax on medicine and 23 per cent on energy cannot be accepted," Koronakis told Skai TV.

'GOOD, CONSTRUCTIVE MEETING'

Eurogroup chief Jeroen Dijsselbloem, who also attended the four-hour talks over dinner in Brussels Wednesday, told reporters it was a "very good meeting".

The European Commission - the executive arm of the 28-member European Union and one of Greece's three bailout monitors along with the IMF and European Central Bank - said in a statement that there had been "progress" during the talks.

"It was a good, constructive meeting. Progress was made in understanding each other's positions on the basis of various proposals. It was agreed that they will meet again," it said.

Senior eurozone officials are due to hold a teleconference later on Thursday, officials told AFP. Many EU leaders will also be in Brussels for a Latin American summit next Wednesday and Thursday.

Still fears of a messy Greek exit from the euro are growing, with its current €240 billion bailout programme due to run out at the end of June, and a total of €1.6 billion in payments due to the IMF this month.

SYRIZA CHALLENGE

In the hours before the Tsipras-Juncker meeting on Wednesday there were frantic efforts to bridge the gap between the demands of the creditors and the hard-left Syriza government's determination to end austerity measures.

German Chancellor Angela Merkel and French President Francois Hollande acknowledged "the necessity" to lower primary surplus targets - a key sticking point with Athens - during phone talks on Wednesday with Tsipras, Greek sources said.

Athens has insisted on lower targets that would allow it to honour promises to voters to increase public spending, having already made compromises on pension reform and sales tax.

Any deal that does eventually emerge faces a major hurdle as the reforms would have to be approved by the Greek parliament.

This could be tough given that Tsipras is under intense pressure from Syriza's influential radical wing to reject any plan that piles more austerity on the recession-hit country.

Some Syriza officials have said they would rather hold snap elections than accept more austerity.