EU officials dismiss Greek statement on aid agreement being drafted

Wed May 27, 2015 12:57pm EDT
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By Lefteris Papadimas

ATHENS (Reuters) - Greece's government on Wednesday said it is starting to draft an agreement with creditors that would pave the way for aid, but European officials quickly dismissed that as wishful thinking.

Greece and its European and International Monetary Fund lenders have been locked in tortuous negotiations on a reforms agreement for four months without a breakthrough in sight. Without a deal, Athens risks default or bankruptcy in weeks.

A new round of talks begin on Wednesday in Brussels, and a Greek government official said the two sides would start drafting a technical-level agreement there, along the lines of Athens' longtime demands for no wage or pension cuts and a lower target for a primary budget surplus.

But European Commission Vice President Valdis Dombrovskis said the two sides still had some way to go before any agreement could be drawn up.

"We are working very intensively to ensure a staff-level agreement," he said. "We are still not there yet."

Other officials in the euro zone, speaking to Reuters on condition of anonymity, were more blunt. One called the Greek remarks "nonsense". Another said: "I wish it were true."

Greek Deputy Foreign Minister Euclid Tsakalotos, who is also a top negotiator in talks with Athens’ lenders, told German newspaper Frankfurter Allgemeine Zeitung that both sides were not only discussing the terms for completing the current aid program, but that talks already included the conditions of additional aid.

“Almost by itself, the two negotiation processes have now been combined,” he said. Tsakalotos also said that the final decision on further aid for Greece and the country’s economic future would come in the next two weeks.   Continued...

Greek Finance Minister Yanis Varoufakis (L) welcomes Prime Minister Alexis Tsipras for a meeting at the ministry in Athens, Greece May 27, 2015.  REUTERS/Alkis Konstantinidis