Greece resumes protracted bailout talks with lenders

Mon Feb 24, 2014 3:02am EST
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By Harry Papachristou and Lefteris Papadimas

ATHENS (Reuters) - Greece resumes bailout talks with its international lenders on Monday, hoping to end six months of wrangling over the release of new rescue loans it needs to avoid default.

At stake is the disbursement of funds to repay 9.3 billion of bonds maturing in May, the biggest single debt redemption Greece faces in the next three decades, according to Thomson Reuters Eikon data.

The review by the European Union and the International Monetary Fund has dragged on since September, with disagreements about the extent of savings and reforms Athens must make to comply with the terms of its bailout.

Lenders say the government is dragging its feet over reforms, such as softening employment protection and introducing more competition, for fear of hurting vested interests and losing voters' support.

"For six months we've been going over the same issues again and again, largely because the Greek government can't agree among themselves", one source close to the lenders told Reuters.

Athens, in turn, accuses the "troika" of the EU, the IMF and the ECB of needlessly protracting talks by misreading economic data, underrating Greece's progress and demanding unpopular measures where none are needed.

"The troika have been tragically wrong in their forecasts and this has created huge problems," Finance Minister Yannis Stournaras said earlier this month, shortly before Athens predicted it would hit a 2013 primary budget surplus of at least 1.5 billion euros, far above troika estimates.

NOT INSUPERABLE   Continued...

A man leaves the Bank of Greece headquarters in central Athens November 27, 2013. REUTERS/John Kolesidis