 "More time may be needed to reach Greece deal: Euro FMs")
Euro-area finance ministers said more time will be needed to hatch a viable deal for Greece as a breakthrough on the terms attached to aid remained elusive.
With just six days until Greece's bailout expires and a payment to the International Monetary Fund falls due, finance chiefs arriving in Brussels Wednesday for their third meeting in a week said they were preparing for lengthy negotiations that might still fail to break the impasse.
"I don't have much new to report," German Finance Minister Wolfgang Schaeuble told reporters. "My feeling is that we're not much further forward from Monday, but let's begin and then see. For my part, the preparations are not sufficiently far advanced that we can aim for a deal today."
Ministers downplayed the chances of an accord after Prime Minister Alexis Tsipras and Greece's creditors clashed over the terms attached to his country's bailout. Tsipras met for about five hours earlier in Brussels with the heads of the three creditor institutions - IMF chief Christine Lagarde, European Commission President Jean-Claude Juncker and European Central Bank President Mario Draghi - without commenting as he left.
European leaders are due to arrive in Brussels Thursday for a two-day summit that takes place in the shadow of the Greek bailout exiry on June 30.
"I don't like all these deadlines because what we need to do here according to my opinion is first of all reach a good agreement for the Greek economy," Belgian Finance Minister Johan Van Overtveldt told reporters. "We'll see how far we get today. If we can't get that today, we'll see where we get tomorrow."
Finnish Finance Minister Alexander Stubb said he would be "positively surprised" if the divide could be bridged during the evening, while Edward Scicluna of Malta said it would take far longer for Greece to regain the trust of creditors "and everyone involved in this lengthy process."
"We are in for a long night," Scicluna said. "I really do hope that we will settle it."
Earlier in the day, international creditors demanded politically sensitive changes to Greek Prime Minister Tsipras' tax and reform proposals on Wednesday, adding fresh uncertainty to talks aimed at unlocking aid to avert a debt default next week.
The leftist Tsipras spent all afternoon in a meeting with the heads of the European Commission, the International Monetary Fund, the European Central Bank and euro zone finance ministers, but officials said there was no breakthrough so far. "They are still stuck at the same red lines," a euro zone official said after more than four hours of the meeting at EU headquarters, which was continuing. Pension reform remained a central dispute.
Prospects of an outcome on Wednesday began to slide, with a Greek government official saying the creditors' demands were not acceptable as they stood, but Tsipras hoped for an agreement later on Wednesday or on Thursday when all 28 EU leaders are due in Brussels for a regular two-day summit.
Before leaving Athens, Tsipras attacked the position of "certain" creditors - a swipe at the IMF - as strange since he said they had rejected fiscal measures Athens put forward to plug a budget gap.
"This odd stance seems to indicate that either there is no interest in an agreement or that special interests are being backed," the premier tweeted. Financial markets reacted nervously, with investors rushing into safe-haven German bonds and the euro suffering a brief sell-off. European shares dropped and US stocks opened lower.
IMF chief Christine Lagarde spelled out her objections to Greek proposals that focused on higher taxes to plug a big budget gap in an interview released on Wednesday. "You can't build a programme just on the promise of improved tax collection, as we have heard for the past five years with very little result," she told French magazine Challenges.
A European Union official insisted the talks had not broken down and said the exchange of proposals was a normal part of the negotiation. But a Greek official said the lenders' five-page document - full of crossings-out and underlining in red ink - differed little from their initial June 3 offer and took scant account of Athens' proposals.
In Athens, State Minister Alekos Flabouraris, considered close to Tsipras, told the ruling Syriza party's political committee the creditors' revised list of demands was "absurd", a Syriza official said.
The talks are especially fraught because there is so little time left to reach a deal before Greece has to make a repayment to the IMF on June 30, the day its current bailout expires.
If Greece misses that payment and is declared in default to the IMF, it could trigger a bank run, capital controls and an eventual Greek exit from the euro zone, showing that membership of the currency is not irrevocable as its founders intended.
Among the unresolved issues were labour laws, collective bargaining, pension reform, public sector wages, opening up closed professions, investment as well as value-added tax and corporate income tax.
Also in dispute were Tsipras' demands for debt relief, which euro zone partners do not want to address at this stage.
"Of course we want changes and they don't, and this is part of the bargaining process, albeit less effective when done publicly," a senior official from one of the creditors said.
Looking tense, Tsipras was driven into European Commission headquarters through an underground garage to avoid the usual arrival statements, and given only a perfunctory handshake by Juncker before plunging into the meeting.
Officials said the IMF was most concerned about the balance of the package, too heavily skewed towards tax increases that could further weaken the economy and prove hard to collect, given Greece's abysmal record.
"If you ask the question 'Is this enough for the IMF to disburse?', I suspect it's not enough," one official said.
Hardline German Finance Minister Wolfgang Schaeuble's spokesman said there was a long way to go before an agreement.
A senior German official said Berlin could not imagine clinching an aid-for-reform deal without the IMF, which was needed not only for its funds but also its expertise.
The Greek proposals featured a series of tax hikes on consumption, businesses and the wealthy and higher contributions to pensions to meet budget targets. The IMF wants to see more savings achieved through budget cuts.
Greece will have to put the agreed measures through its parliament by Monday so that some other euro zone parliaments can endorse the deal and unblock aid funds.
Athens must repay euro 1.6 billion to the IMF next Tuesday.
EU officials said the only way to fund that was for euro zone governments to hand over nearly euro 2 billion in profits from ECB holdings of Greek government bonds purchased in 2011-12.
Emergency help
To keep Greek banks afloat, the ECB increased its emergency liquidity ceiling again on Tuesday. ECB sources have said the lifeline will be extended daily as long as there is a chance of a deal by end-June.
The more concessions Tsipras makes, the more resistance he will face in parliament within his leftist Syriza party and on the streets, where a series of recent protests, some organised with Syriza's support, have underlined public opposition to yet more belt-tightening.
"There are four people in my household, and we are living on euro 600 a month. Where else does that happen?" said 59-year-old Antonia Methoniou, a cancer patient who took early retirement for health reasons.
The IMF says Greece will need either some form of debt restructuring or further loans to make its finances sustainable.
But euro zone officials insisted that the creditors would not discuss any debt restructuring until after Greece implements the remainder of its bailout programme, and German Chancellor Angela Merkel has ruled out any "haircut" or debt write-off.
This will add to the difficulty of getting parliamentary approval in Athens, notably from the nationalist Independent Greeks, whose support Tsipras needs for a majority.
They also reject moves to scrap VAT exemptions enjoyed by some Greek islands.
"I could not vote for such a measure, nor, obviously, could I participate in a government violating a line on which we received a mandate from the Greek people," party leader Panos Kammenos tweeted on Tuesday.
But Economy Minister George Stathakis said he was confident parliament would back a deal before June 30: "I think this balanced deal is defensible to Syriza, and in Greek society too."
With just six days until Greece's bailout expires and a payment to the International Monetary Fund falls due, finance chiefs arriving in Brussels Wednesday for their third meeting in a week said they were preparing for lengthy negotiations that might still fail to break the impasse.
Read more from our special coverage on "GREECE CRISIS"
"I don't have much new to report," German Finance Minister Wolfgang Schaeuble told reporters. "My feeling is that we're not much further forward from Monday, but let's begin and then see. For my part, the preparations are not sufficiently far advanced that we can aim for a deal today."
Ministers downplayed the chances of an accord after Prime Minister Alexis Tsipras and Greece's creditors clashed over the terms attached to his country's bailout. Tsipras met for about five hours earlier in Brussels with the heads of the three creditor institutions - IMF chief Christine Lagarde, European Commission President Jean-Claude Juncker and European Central Bank President Mario Draghi - without commenting as he left.
European leaders are due to arrive in Brussels Thursday for a two-day summit that takes place in the shadow of the Greek bailout exiry on June 30.
"I don't like all these deadlines because what we need to do here according to my opinion is first of all reach a good agreement for the Greek economy," Belgian Finance Minister Johan Van Overtveldt told reporters. "We'll see how far we get today. If we can't get that today, we'll see where we get tomorrow."
Finnish Finance Minister Alexander Stubb said he would be "positively surprised" if the divide could be bridged during the evening, while Edward Scicluna of Malta said it would take far longer for Greece to regain the trust of creditors "and everyone involved in this lengthy process."
"We are in for a long night," Scicluna said. "I really do hope that we will settle it."
Earlier in the day, international creditors demanded politically sensitive changes to Greek Prime Minister Tsipras' tax and reform proposals on Wednesday, adding fresh uncertainty to talks aimed at unlocking aid to avert a debt default next week.
The leftist Tsipras spent all afternoon in a meeting with the heads of the European Commission, the International Monetary Fund, the European Central Bank and euro zone finance ministers, but officials said there was no breakthrough so far. "They are still stuck at the same red lines," a euro zone official said after more than four hours of the meeting at EU headquarters, which was continuing. Pension reform remained a central dispute.
Prospects of an outcome on Wednesday began to slide, with a Greek government official saying the creditors' demands were not acceptable as they stood, but Tsipras hoped for an agreement later on Wednesday or on Thursday when all 28 EU leaders are due in Brussels for a regular two-day summit.
Before leaving Athens, Tsipras attacked the position of "certain" creditors - a swipe at the IMF - as strange since he said they had rejected fiscal measures Athens put forward to plug a budget gap.
"This odd stance seems to indicate that either there is no interest in an agreement or that special interests are being backed," the premier tweeted. Financial markets reacted nervously, with investors rushing into safe-haven German bonds and the euro suffering a brief sell-off. European shares dropped and US stocks opened lower.
IMF chief Christine Lagarde spelled out her objections to Greek proposals that focused on higher taxes to plug a big budget gap in an interview released on Wednesday. "You can't build a programme just on the promise of improved tax collection, as we have heard for the past five years with very little result," she told French magazine Challenges.
A European Union official insisted the talks had not broken down and said the exchange of proposals was a normal part of the negotiation. But a Greek official said the lenders' five-page document - full of crossings-out and underlining in red ink - differed little from their initial June 3 offer and took scant account of Athens' proposals.
In Athens, State Minister Alekos Flabouraris, considered close to Tsipras, told the ruling Syriza party's political committee the creditors' revised list of demands was "absurd", a Syriza official said.
The talks are especially fraught because there is so little time left to reach a deal before Greece has to make a repayment to the IMF on June 30, the day its current bailout expires.
If Greece misses that payment and is declared in default to the IMF, it could trigger a bank run, capital controls and an eventual Greek exit from the euro zone, showing that membership of the currency is not irrevocable as its founders intended.
Among the unresolved issues were labour laws, collective bargaining, pension reform, public sector wages, opening up closed professions, investment as well as value-added tax and corporate income tax.
Also in dispute were Tsipras' demands for debt relief, which euro zone partners do not want to address at this stage.
"Of course we want changes and they don't, and this is part of the bargaining process, albeit less effective when done publicly," a senior official from one of the creditors said.
Looking tense, Tsipras was driven into European Commission headquarters through an underground garage to avoid the usual arrival statements, and given only a perfunctory handshake by Juncker before plunging into the meeting.
Officials said the IMF was most concerned about the balance of the package, too heavily skewed towards tax increases that could further weaken the economy and prove hard to collect, given Greece's abysmal record.
"If you ask the question 'Is this enough for the IMF to disburse?', I suspect it's not enough," one official said.
Hardline German Finance Minister Wolfgang Schaeuble's spokesman said there was a long way to go before an agreement.
A senior German official said Berlin could not imagine clinching an aid-for-reform deal without the IMF, which was needed not only for its funds but also its expertise.
The Greek proposals featured a series of tax hikes on consumption, businesses and the wealthy and higher contributions to pensions to meet budget targets. The IMF wants to see more savings achieved through budget cuts.
Greece will have to put the agreed measures through its parliament by Monday so that some other euro zone parliaments can endorse the deal and unblock aid funds.
Athens must repay euro 1.6 billion to the IMF next Tuesday.
EU officials said the only way to fund that was for euro zone governments to hand over nearly euro 2 billion in profits from ECB holdings of Greek government bonds purchased in 2011-12.
Emergency help
To keep Greek banks afloat, the ECB increased its emergency liquidity ceiling again on Tuesday. ECB sources have said the lifeline will be extended daily as long as there is a chance of a deal by end-June.
The more concessions Tsipras makes, the more resistance he will face in parliament within his leftist Syriza party and on the streets, where a series of recent protests, some organised with Syriza's support, have underlined public opposition to yet more belt-tightening.
"There are four people in my household, and we are living on euro 600 a month. Where else does that happen?" said 59-year-old Antonia Methoniou, a cancer patient who took early retirement for health reasons.
The IMF says Greece will need either some form of debt restructuring or further loans to make its finances sustainable.
But euro zone officials insisted that the creditors would not discuss any debt restructuring until after Greece implements the remainder of its bailout programme, and German Chancellor Angela Merkel has ruled out any "haircut" or debt write-off.
This will add to the difficulty of getting parliamentary approval in Athens, notably from the nationalist Independent Greeks, whose support Tsipras needs for a majority.
They also reject moves to scrap VAT exemptions enjoyed by some Greek islands.
"I could not vote for such a measure, nor, obviously, could I participate in a government violating a line on which we received a mandate from the Greek people," party leader Panos Kammenos tweeted on Tuesday.
But Economy Minister George Stathakis said he was confident parliament would back a deal before June 30: "I think this balanced deal is defensible to Syriza, and in Greek society too."