(REUTERS) Sceptical euro zone finance ministers demanded on Saturday (July 11) that Greece go beyond painful austerity measures accepted by Prime Minister Alexis Tsipras if he wants them to open negotiations on a third bailout for his bankrupt country to keep it in the euro.
The ministers meeting in Brussels postponed until Sunday a decision on whether to recommend starting talks on a new loan for Athens and sought further commitments first on product market liberalisation, labour laws, privatisation, state reform and more defence cuts, plus a promise to pass key laws next week, officials said.
The Eurogroup session will resume on Sunday, hours before heads of state and government of the 19-nation currency area are due to meet to decide on Greece’s fate in the euro area.
Eurogroup Chairman Jeroen Dijsselbloem told reporters after the nine-hour session adjourned at midnight the talks were very difficult and that work was still in progress.
“It was of course a very difficult meeting, we will continue tomorrow morning at 11 o’clock. We have discussed the Greek proposals in depth, we have heard all the comments from the institutions, we have heard the comments of the member states, and of course the financial issues that it brings with it. I have to note that we have to continue this discussion, we are far from out of it, there are a number of big issues that came on the table that haven’t been solved but tomorrow at 1100 (0900 GMT) we continue the discussion, so that’s all I can say for the moment,” he said.
EU officials forecast a deal would be reached by the end of the weekend to keep Greece afloat, but there was consensus among the euro zone’s other 18 finance ministers that the leftist government in Athens must take further steps to convince them it would honour any new promises and repay its debts.
Finland’s state broadcaster YLE reported that the Finnish government had told parliament’s influential Grand Committee on Saturday it did not consider the Greek proposal sufficient to start negotiations on a new loan. The government declined to comment. Helsinki’s stance has hardened since the populist Finns Party joined a right-wing coalition that took office in May.
Finnish Finance Minister Alexander Stubb spoke with a note of optimism.
“We will continue the discussions tomorrow. We are progressing well,” he told reporters.
Tsipras won parliamentary backing early on Saturday for a tough reform package that largely mirrored measures previously demanded by its international creditors but rejected by Greek voters at his behest in a referendum last Sunday.
A positive assessment of the Greek proposals delivered by the European Commission, European Central Bank and IMF late on Friday, along with bullish comments from Athens’ key euro zone ally France, had raised expectations that the Eurogroup would give a green light to new loan negotiations.
Euro zone leaders, including German Chancellor Angela Merkel and French President Francois Hollande, are due to meet on Sunday, either to endorse a decision to open talks on a new bailout or if, along with other EU leaders, to take steps to contain the fallout from a looming Greek bankruptcy.
European Economic and Monetary Affairs Commissioner Pierre Moscovici said he hoped for a result on Sunday.
“I always have hope,” he said.
Greece asked for 53.5 billion euros ($59 billion) to help cover its debts until 2018, a review of primary budget surplus targets in the light of the sharp deterioration of its economy, and a “reprofiling” of the country’s long-term debt.
Any deal would also have to be endorsed by national parliaments including in Germany, which must also formally approve the loan negotiations being started.