Greece seeks loan deal by end of May

Image source, Reuters

Greece has said it wants to reach a loan deal with its international creditors by the end of this month.

With the country seemingly close to running out of cash, government spokesman Gabriel Sakellaridis said a deal was "required immediately".

Greece has to make a payment of €1.5bn (£1.09bn) to the International Monetary Fund (IMF) on 5 June.

Last week , the government raided its IMF reserves in order to pay €750m in debt interest on its existing loans.

"A deal is required immediately, this is why we are talking about the end of May, to resolve these critical liquidity issues," Gabriel Sakellaridis said.

The Greek government, EU and IMF have been locked in negotiations for four months over economic reforms the IMF and EU say must be implemented before the latest €7.2bn tranche of the country's bailout fund is released.

The deadlock has created fresh fears that Greece will run out of cash.

Issues still to be resolved are thought to include pension reform, deregulation of the labour market, and the re-hiring of 4,000 former civil servants.

There have been suggestions Greece could default on loan repayments as early as the next €1.5bn payment due to the IMF.

Greece faces a stringent repayment schedule in the coming months, and also needs to continue paying salaries and pensions.

EU Commission spokesman Margaritis Schinas welcomed the commitment by the Greek government to bring the talks to a conclusion but said "more time and effort is needed to bridge the gaps on the remaining open issues in the negotiations".

"Constructive contacts are ongoing and progress is being made, even though still at a slow pace," he added.

He admitted Greece was likely to be one of the main topics of conversation at this week's EU Eastern Partnership Summit in the Latvian capital, Riga.

But he added that whatever happened there could be no "substitute for the need to bridge the gaps on the last remaining issues that are being discussed".

Separately, the Commission declined to confirm reports in Greek newspaper To Vima that Commission President Jean Claude Juncker was working on watered-down economic reforms that the Greek government could agree to and allow the next tranche of bailout money to be released.

The newspaper claimed the proposal put forward to the Greek government required fewer reforms and a smaller primary surplus target than the 3% of GDP currently demanded.

"I can't confirm media reports on @EU-Commission/Juncker proposal on GR. Not aware of such proposal. Working towards comprehensive deal," Commission spokeswoman Annika Breidhardt said on Twitter.

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