ATHENS—Officials in Athens suggested that talks with
Greece's creditors over fresh bailout funds had reached a final
stage, though European Union officials said negotiators still had
much work to do before sealing a deal.
Teams from Greece and its international creditors resumed talks
in Brussels on Wednesday in a bid to overcome an impasse in their
negotiations as Athens runs dangerously low on cash. The latest
round began as U.S. Treasury chief Jacob Lew urged both sides to
"double down" in their efforts to reach a deal to solve the
country's debt crisis, saying it would be wrong to assume that a
disorderly Greek exit would be painless.
"No one should have a false sense of confidence that they know
what the risk of a crisis in Greece would be," Mr. Lew said in an
address to students at the London School of Economics.
The U.S. Treasury Department later said that Mr. Lew spoke
Wednesday to the Greek Prime Minister Alexis Tsipras by phone.
"Secretary Lew reiterated that failure to agree on a path forward
would create immediate hardship for Greece and broad uncertainties
for Europe and the global economy," a Treasury spokeswoman
said.
Mr. Tsipras told reporters after a meeting at the Finance
Ministry on Wednesday that the two sides were close to an
agreement. A senior Greek government official, meanwhile, said
Greece and its creditors would start drafting a final list of
overhauls and budget cuts that Athens needs to implement to secure
fresh bailout funds.
But Valdis Dombrovskis, vice president of the European
Commission, played down hopes of a resolution soon, saying Greece
and its creditors were still some way from a deal.
"There needs to be a comprehensive reform package presented by
the Greek government in order to successfully complete the review,"
Mr. Dombrovskis told reporters.
German Finance Minister Wolfgang Schaeuble also said that no
progress in substance has been made."We always hear positive news
coming out of Greece, which is good. However, we haven't gotten
much further in substance in the negotiations between the three
institutions and the Greek government," he said on German
television. "That's why I am always a bit surprise that people in
Athens always say we are close to reach an agreement."
The negotiations between the negotiating teams in Brussels are
expected to continue to the end of the week and talks between
eurozone finance ministry officials are scheduled for Thursday.
Greece is under pressure to agree to economic overhauls with its
creditors to unlock new financing. Athens is believed to have
enough cash left to repay a loan of €300 million ($330
million) to the International Monetary Fund on June 5, but likely
won't have enough to cover three further repayments due
mid-June.
The government has been holding stop-start negotiations with its
creditors for weeks, but there is still dissatisfaction with
Greece's promises on economic reforms. Significant differences
remain on pensions, privatization, labor law and fiscal
austerity.
According to the Greek official, there is still disagreement
between European institutions and the IMF, adding that if approval
by the IMF wasn't necessary, "the deal would have closed by
now."
The official said that while the commission and the European
Central Bank want a deal by the end of the month, IMF officials
insist that there should be a comprehensive agreement on a list of
economic overhauls and not a "quick and-dirty" deal.
But EU officials have also insisted that a comprehensive policy
package is key to securing a deal, which would allow financing to
flow, initially in the form of a permission by the ECB for Greece
to sell more short-term debt to its banks. Without an agreement,
Greece's creditors won't be able to unlock any further aid
disbursements, officials say.
Mr. Tsipras said that the country's deposits weren't at risk and
that wages and pensions would be paid normally.
"We have to deal with three different institutions that
sometimes have contradictory views," the Greek premier said.
Greece's central bank didn't request an increase to the amount
Greek banks can borrow under the ECB's emergency lending program,
two people familiar with the matter said Wednesday.
"There hasn't been any raise, since there is an unused liquidity
buffer of 3 billion euros ($3.3 billion) and deposit outflows have
stabilized," a Greek bank official said.
Jason Douglas, Andrea Thomas and Matthew Dalton contributed to
this article.
Write to Nektaria Stamouli at nektaria.stamouli@wsj.com
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