Eurozone and Greece fail to agree bailout deal

A worker writes on a piece of paper at the entrance of Athens' main fish market with a Greek flag in the background on Monday

A worker writes on a piece of paper at the entrance of Athens' main fish market with a Greek flag in the background on Monday

While Greek lawmakers approved a series of tax rises and pension cuts last week Athens also needs to pass a set of laws to make the reforms stick before the funds are unlocked.

But Jeroen Dijsselbloem, the chairman of the eurozone finance ministers, told reporters that the disbursement would likely take place "before the summer".

He said "extra measures if required" would come after the bailout programme expires next year.

Greece needs new cash from the euro zone to avoid a default in July when it has to repay some 7.3 billion euros ($8.20 billion) worth of maturing loans.

Last week, as the Greek parliament passed the bill, prime minister Alexis Tsipras said that "debt relief [would] correspond to the sacrifices of the Greek people".

Debt burden Greece's debt burden after restructuring privately held government bonds in 2012 and three bailouts is projected at €319 billion this year or 176 per cent of its economic output.

The IMF has argued that the eurozone forecasts underpinning the Greek bailout are too rosy and that the country as a result should get substantial debt relief so it can start growing on a sustainable basis following a depression that's seen the economy shrink by a quarter and unemployment and poverty levels ratchet up sharply.

"We have to find a scenario on debt that holds for years to come and that everyone can accept, including the International Monetary Fund", an European Union diplomat said on condition of anonymity.

Dijsselbloem said the parties agreed on a target for Greece's primary surplus, which excludes interest payments, of 3.5 percent of gross domestic product until 2022.

Despite another round of marathon talks yesterday, Greece's creditors failed to agree on fundamental elements of the country's bailout programme.

Led by tough negotiator and former French finance minister Christine Lagarde, the International Monetary Fund says Greece's debt is unsustainable and will be "explosive" in the long run, requiring a more ambitious plan from Europe.

He said talks would resume at the next meeting of finance ministers in June.

"We believe that in the coming weeks we will have the opportunity to work hard toward covering those gaps and reaching a desirable solution", he said.

The next meeting of the so-called Eurogroup is scheduled for June 15 in Luxembourg. Bruno Le Maire and Wolfgang Schäuble flew to Brussels in the same plane, after a press conference in Berlin where they announced a working group on eurozone reform.

The protracted nature of Greece's bailout program has been costly for the country.

After the Eurogroup meeting, French finance minister Le Maire said that Germany's role had been "constructive" but that he "would be lying if [he] said that France and Germany have no difference over the sustainability of Greek debt".

The first scenario would see little or no need for debt relief, while the second one would require a generous restructuring of Greece's debt burden.

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