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Pressure raises as troika to put deal to Greece

Greece’s creditors yesterday drafted the broad lines of an agreement to put to the leftist government in Athens in a bid to conclude four months of acrimonious negotiations and release aid before the cash-strapped country runs out of money.

The troika efforts to set out the terms for a cash-for-reforms deal came after the leaders of Germany and France held emergency talks with the institutions in Berlin on Monday to press the lenders to bridge their own differences and find a solution.

“It covers all key policy areas and reflects the discussions of recent weeks,” said a senior EU official, adding that it will be discussed with Greek prime minister Alexis Tsipras today.

Another official said German chancellor Angela Merkel and French president François Hollande would put the plan to Mr Tsipras by telephone within hours to try to secure his acceptance.

Mr Tsipras, who has vowed not to surrender to more austerity, tried to preempt a take-it-or-leave-it offer by the creditors, sending what he called a comprehensive reform proposal to Brussels on Monday before they could complete their version.

Eurozone officials said that the the Greek text was insufficient and said it was not formally on the table.

The Greek leader faces a backlash from his own supporters if he has to accept cuts in pensions and job protection to avert a default and keep Greece in the euro zone.

Despite defiant rhetoric and face-saving efforts, he seems likely to have to swallow painful pension and labour reforms, facing the choice between putting them to parliament at the risk of a revolt in his Syriza party, or calling a snap referendum.

Starved of aid and access to bond markets, Athens is precipitously close to running out of money. It has threatened to default on an IMF payment this week without a deal, though it also says it will reject any ultimatums.

Failure to reach agreement this month could trigger a Greek default and lead to the imposition of capital controls and a potential exit from the eurozone.

The eurozone source said the Greek document contained no significant concessions on the main outstanding issues of pension and labour market reform, fiscal targets, and the size of the civil service.

The EU’s economics chief said earlier that Athens had put forward proposals for pension reform.

The chairman of eurozone finance ministers, Jeroen Dijsselbloem, said there were growing indications that Greece wanted a deal, but that required the Greek government to tell its voters the truth, that it will not be able to deliver on all its election promises.

“There are signs that Greece and Tsipras are motivated to achieve a breakthrough,” Mr Dijsselbloem said. “We aren’t far enough along and time is pressing.”

“The bottom line is that we are not going to meet them halfway. The package as a whole must make sense in budgetary terms.”

A Greek government official said Athens would make a €300m repayment to the IMF on Friday as due if there was an agreement with the creditors, hinting it might otherwise withhold the money without saying so explicitly.

“If we judge that a deal has been sealed, then we will make the June 5 payment normally,” the Greek official said.

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