Stakes raised as Greece, lenders resume talks on bailout loan

Mon Jul 1, 2013 4:14am EDT
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By Harry Papachristou

ATHENS (Reuters) - Greece and its international lenders resume talks on Monday to unlock 8.1 billion euros ($10.5 billion) of rescue loans after a two-week break during which the government almost collapsed over redundancies at state broadcaster ERT.

Prime Minister Antonis Samaras has said he expects the talks to conclude successfully, despite setbacks to the country's privatization program and delays in public sector reforms.

To pressure Athens to deliver on reforms, the trio of lenders might refuse to pay the full sum in one go and break it up into three monthly payments instead, Greek media reported.

"The biggest issue in the negotiations will be the delays in public sector reforms," a senior finance ministry official told Reuters.

Athens missed a June deadline to place 12,500 state workers into a "mobility scheme", under which they are transferred or dismissed within a year.

The country is battling through its sixth year of recession, and the latest installment is one of the last big cash injections it stands to get before the 240-billion-euro bailout expires at the end of 2014.

The stakes are high. If the talks fail, the International Monetary Fund might have to withdraw from Greece's rescue to avoid violating its own rules. Athens also needs to redeem about 2.2 billion euros of bonds in August.

Finance Minister Yannis Stournaras will have his first meeting with representatives of the troika of lenders - the IMF, European Union and European Central Bank - at 1400 GMT.   Continued...

Greece's Prime Minister Antonis Samaras (L) and newly appointed Foreign Minister and Deputy Prime Minister Evangelos Venizelos walk after a swearing in ceremony at the Presidential Palace in Athens June 25, 2013. REUTERS/John Kolesidis