Greece is having a discussion that it has never had before
REUTERS/Alkis Konstantinidis
AMSTERDAM (Reuters) - Greece and its international lenders are unlikely to reach an agreement on Friday that would unlock further loans and pave the way for debt relief talks, despite some progress made in talks on reforms, euro zone officials said on Friday.
"I'm hearing good news from Athens, so let's see where we are," the chairman of euro zone finance ministers Jeroen Dijsselbloem told reporters.
"If we make progress on the content of the program and the next steps then we need to start the discussion on debt. We're only at the beginning of that discussion, so don't expect any deals today," he said on entering a meeting with euro zone ministers.
"Debt is a discussion we've not had before. The only thing we had was a promise that if the Greeks would commit fully and deliver on the program we would look at, if necessary, further debt measures," he said.
The head of the International Monetary Fund Christine Lagarde struck a more pessimistic tone on Friday, saying that Greece and its lenders had made some progress towards an agreement on reforms, but not enough to unlock new loans or start talks on vital debt relief.
"There is more work to be done. We are determined to continue the work. We're not there yet," Lagarde said on arriving for a meeting of euro zone finance ministers. "There is more to be done and a debt sustainability to be agreed upon as well. It's critically important."
Germany and several other countries, including Finland and Slovakia, oppose debt relief for Athens, arguing it is not necessary. The IMF believes that without it, Greek debt will not be sustainable.
REUTERS/Alkis KonstantinidisGerman Finance Minister Wolfgang Schaeuble said that discussions would not be concluded on Friday but that progress was being made. He added that the focus was on Athens implementing its bailout agreement rather than on debt relief.
"If Greece implements what was agreed last year - and we're working on that - then there will be no need to discuss this topic," he said when asked about debt relief.
For Lagarde though, debt relief is critically important. "That program has to walk on two legs. There has to be sufficient reforms and we are making progress on that front, some progress, and there has to be debt sustainability at the end of the day and on that front we have not yet started the discussion," Lagarde said.