May 28, 2015 / 9:25 AM / in 2 years

No change in Greek debt talks after another day of spin

BRUSSELS (Reuters) - The euro leapt, Greek bond yields fell, global financial markets brightened, but nothing actually changed in another day of conflicting statements on Greece’s long-running debt talks with international creditors.

A Greek flag flies behind a statue to European unity outside the EU Parliament in Brussels, Belgium, May 20, 2015. REUTERS/Francois Lenoir

Traders latched on to an upbeat statement issued by a Greek government official on Wednesday afternoon asserting that negotiators were starting to draft a “staff level agreement” - a prerequisite for releasing any more bailout funds.

The snag was that talks had not even resumed at that point due to a Belgian air traffic control breakdown that forced the Greek delegation’s plane to land in Duesseldorf, Germany.

When the meeting with representatives of the International Monetary Fund, European Central Bank and European Commission finally began several hours late, there was no start on drafting a deal because too much remains to be agreed, EU officials said.

“We’re not there yet,” an official following the talks said.

Desperate to receive more funds before it runs out of cash, the leftist-led government of Prime Minister Alexis Tsipras has alternated between lashing out at the creditors, especially the IMF, and declaring that a deal is just around the corner.

EU officials and euro zone paymaster Germany have rushed to pour cold water on such optimism, saying that little or nothing has changed at the negotiating table.

On Wednesday, European Commission Vice-President for the euro Valdis Dombrovskis said progress was slow and listed a string of issues including pension and labor market reform and fiscal targets that remained unresolved.

Hardline German Finance Minister Wolfgang Schaeuble went on television to say: “One is hearing all this positive news coming from Greece. That’s nice. But on the substance, we haven’t got much further in the negotiations between the three institutions and the Greek government.”

And IMF Managing Director Christine Lagarde said the talks had not yet produced substantial results. “Things have moved, but there is still a lot of work to do,” she told ARD television on Thursday.

Additional reporting by Renee Maltezou in Athens; Writing by Paul Taylor; editing by David Stamp

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