Greece bailout: 'Our patience is running out,' say European Union officials

Officials privately poured cold water on the Greek plans

(Reuters)

European Union officials have slapped down Greece’s latest economic reform pledges, undermining hopes that Athens and it creditors might finally be moving towards a deal to release €7.2bn (£5.2bn) of bailout funds.

The Athens administration handed over fresh proposals on labour market and pension reforms and budget surpluses to Brussels amid signs that Alexis Tsipras, the Greek Prime Minister, might be adopting a more conciliatory tone to secure the funds that Greece needs to avoid defaulting later this month.

The Greek stock market had jumped 2 per cent on hopes of an imminent deal. The chief spokesman for the European Commission said the EU executive was studying the suggestions but officials privately poured cold water on the Greek plans.

“What has been submitted is not sufficient to move the process forward” one told Reuters. Another told the news agency that the Greek plans were “not sufficient and not acceptable to member states”.

Mr Tsipras is due to meet the German Chancellor, Angela Merkel and the French President, François Hollande on Wednesday.

Greece needs to repay the International Monetary Fund €1.6bn at the end of the month, having made the surprise decision last week to bundle all the payments due over June.

“We will do everything to keep Greece in the eurozone but our patience is running out” said the Finnish Finance Minister, Alexander Stubb.

Valdis Dombrovskis, the Commission vice-president with responsibility for the euro, told a press conference in Brussels that a staff-level accord could be close, if primary surplus targets are agreed. But he also warned Athens that its “tactical manoeuvring” must end.

The Greek treasury is running out of the money it needs to pay public sector workers. Figures released by Eurostat showed that the economy is back in recession, having contracted by 0.2 per cent in the first quarter of 2015, following a 0.4 per cent contraction in the final three months of 2014.