Eurozone creditors hail ‘progress’ in talks over Greece’s bailout

The eurogroup wants Greece to commit to far-reaching structural economic reforms before it releases the bailout cash

Greece’s eurozone creditors yesterday welcomed “progress” in the crunch talks over the country’s future in the single currency – but failed once again to release the €7.2bn (£5.2bn) bailout payment that it desperately needs to meet its liabilities.

“We welcome the progress that has been achieved so far,” said a eurogroup statement after its meeting in Brussels. “At the same time, we acknowledge that more time and effort are needed to bridge the gaps on the remaining open issues.”

The eurogroup wants Greece to commit to far-reaching structural economic reforms before it releases the bailout cash.

But Greece’s Syriza-led government is resisting, saying that some of the demands of its creditors would breach the anti-austerity manifesto on which it was elected in January. The stand-off has increased the risk that Greece could default on its debt and possibly end up crashing out of the single currency.

Despite the impasse Greek officials said yesterday that they have managed to collect enough money to make the €750m payment due to the International Monetary Fund today and that it will be paid on time. But with tax revenues drying up and the country’s economy stalled, this hand-to-mouth approach cannot go on. Large bond repayments are due in July and August and the country could soon run out of cash to pay public sector workers.

The progress referred to by the eurogroup is thought to refer to the willingness of the Greeks to engage substantively in the talks: “We note that the reorganisation and streamlining of working procedures has made an acceleration possible, and has contributed to a more substantial discussion,” it said.

Yesterday’s progress announcement could persuade the European Central Bank to keep its emergency liquidity operations open to Greek banks.