EU ready to restate debt rescheduling pledge to clinch Greek deal

  • World
  • Saturday, 27 Jun 2015

BRUSSELS (Reuters) - Greece's creditors see limited scope to accommodate Athens in talks on financing for reforms to clinch a deal on Saturday and are willing to reaffirm a 2012 promise to consider rescheduling its debt, a senior official close to the talks said.

The EU official, who asked not to be named because of the sensitivity of the talks, said despite the hardline position of most euro zone finance ministers, EU leaders expressed the political will at a summit in Brussels to take half a step towards Greece.

The chances of a deal on Saturday, when euro zone finance ministers meet at 1200 GMT were better than 50 percent, the official said, although it was less certain if the Greek parliament would endorse an agreement struck by the government.

To facilitate a deal, the creditors could restate a November 2012 pledge by euro zone finance ministers to help make Greek public debt sustainable by extending loan maturities and a moratorium on interest payments and lowering interest rates.

If Greece were to accept the offer with some small new concessions to accommodate Athens' views, the country could then count on financing for the next five months -- until the end of November -- thanks to a bailout extension.

That money would total 15.3 billion euros from the euro zone and probably 3.5 billion euros from the International Monetary Fund, if Greece meets all the reform milestones.

Athens has to pay the Fund 1.6 billion euros on June 30 but cannot do that without money from the euro zone. If it cannot make the payment on Tuesday, it will be in arrears with the IMF.

Even if Greece and its creditors reach a deal on Saturday, there might not be enough time to lend the necessary sum before Tuesday because the deal and various reform laws would have to be approved by the Greek parliament.

Some euro zone parliaments would also have to approve the disbursement to Greece of the profits made on European Central Bank purchases of Greek bonds earlier in the crisis.

While a bad signal for financial markets, the fallout of Greece not making the payment in time could be managed if the missed deadline was accompanied by a clear statement that there was a deal and that payment would be made in a matter of days, the official said.

(Reporting By Jan Strupczewski; Editing by Paul Taylor)

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