Europe dampens Greek hopes of swift deal as clock ticks

Tue May 19, 2015 11:32am EDT
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By Lefteris Papadimas and Jan Strupczewski

ATHENS/BRUSSELS (Reuters) - Greece's European lenders on Tuesday played down Athens's hopes of a swift end to negotiations on an aid agreement and said talks must speed up before the country runs out of cash.

The sober outlook from Brussels and Berlin contrasted sharply with vigorous optimism displayed in Athens, where top officials from the new leftist government made a series of public appearances to promise that a deal was just days away.

Finance Minister Yanis Varoufakis told a talk show overnight that a deal could arrive in a week, while Prime Minister Alexis Tsipras said talks were in their "final stretch".

The comments helped push Greek stocks up 2.6 percent on Tuesday.

But euro zone policymakers said talks were not moving nearly as fast as needed to clinch a deal in a short time.

"More time and effort is needed to bridge the gaps on the remaining open issues. We consider that progress is being made, albeit at a slow pace," European Commission spokesman Margaritis Schinas told a daily news briefing.

The Commission also denied a Greek newspaper report that its chief, Jean-Claude Juncker, had offered a compromise proposal to break the impasse in talks, which set a lower primary surplus target for Athens in return for tax reforms and tax hikes.

After a meeting in Berlin, the leaders of Germany and France said talks must be accelerated to free up fresh aid to Athens.   Continued...

A Greek national flag and a European Union flag flutter outside the Maximos mansion as a government council at the Prime Minister's office takes place, in Athens May 13, 2015. REUTERS/Alkis Konstantinidis