Another crunch week in Greek bailout saga

Sun Apr 19, 2015 5:05am EDT
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By Mike Peacock

LONDON (Reuters) - The threat posed by Greece beyond its borders may have diminished but efforts to agree an economic reform program to free up bailout funds and avert default will capture world attention this week.

Euro zone finance ministers meet in the Latvian capital Riga on Friday with both sides saying time is running short to keep Greece afloat. But with Athens yet to produce a program of reforms that is deemed acceptable, there is little confidence they will pull off a deal.

Germany said last week it was unrealistic to expect euro zone countries to be able to pay out a new tranche of aid this month.

"No one has a clue how we can reach agreement on an ambitious program," Finance Minister Wolfgang Schaeuble said.

Greek Prime Minister Alexis Tsipras, elected on a promise to end austerity, is balking at politically sensitive reforms of the pension system and labor markets and a privatization program to which his predecessor had agreed.

Athens is dangerously close to running out of cash.

Officials told Reuters it will need to tap all the remaining cash reserves across its public sector -- a total of 2 billion euros -- to pay civil service wages and pensions at the end of the month.

Without a deal in Riga, Athens could soon be forced to choose between making those payments or meeting upcoming debt bills. Greece must pay almost 1 billion euros in May to the International Monetary Fund, which has made clear it will accept no delay.    Continued...

A Greek national flag flutters atop the parliament building in Athens April 7, 2015.  REUTERS/Alkis Konstantinidis