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Greece bailout monitors question access to ministries

Negotiators from Greece’s bailout monitors will fly to Athens on Monday to formally begin talks on a €86bn rescue after days of delays over whether the Greek government would allow creditors to have full access to staff and facilities.

Despite an agreement that gives teams from the EU and the International Monetary Fund access to some ministries and data, officials said only middle-ranking technical teams — and not mission chiefs — would participate for now.

The IMF, which last week scrapped its €28bn bailout programme that was originally to run until March, on Friday received a request from Athens for a new rescue. It is unlikely to send negotiators until later in the week, officials said. Opening talks on an IMF programme must first be approved by the fund’s board.

The decision to send lower-level negotiators on Monday is the latest sign of concern among Greece’s creditors that, despite the summit agreement two weeks ago to restart talks, there remain deep differences on the way forward that could still derail negotiations before an August 20 deadline.

The most contentious issue, according to officials involved in the talks, is whether Athens will need to implement additional reform measures to receive quick aid under the bailout programme.

Creditors have insisted the two rounds of reforms passed by the Greek parliament this month were prerequisites to getting the talks started. They also served as the conditions for a €7bn bridging loan from the EU that prevented Athens from defaulting on a bond owed last week to the European Central Bank.

They insist that Greek authorities will have to legislate for more reforms — known as “prior actions”, because these must be passed before aid is disbursed — to gain any payments under a new three-year bailout programme.

Athens is resisting any additional reform measures, officials said, arguing the measures already passed should be all that is required for the first tranche of aid.

“This, at present, is the big, fat, issue,” said one official involved in the talks. “They do not want to understand that there will be yet another significant package of ‘prior actions’ before any disbursement. They already have implementation fatigue after two mini-bills.”

Some eurozone countries, including Germany, are pushing for another round of “prior actions” to be passed by the Greek parliament even before a new memorandum of understanding is agreed with creditors. Officials said that if creditors decided to demand additional measures before inking the deal, they would probably serve as the “prior actions” for the first bailout disbursement as well.

Officials had hoped to finish an agreement by August 11, when a meeting of eurozone finance ministers has been tentatively scheduled to approve a bailout programme. The quick pace is intended to get a deal in place before Athens owes another €3.2bn on a bond held by the ECB on August 20.

But officials said the differences remained so significant that they could require the EU to agree another €5bn bridging loan so that talks could continue into the autumn. In addition to the €3.2bn needed for the ECB bond, officials said about €500m is needed for interest payments and a small loan repayment to the IMF. The remaining cash would be used to meet government wage and pension payments.

Despite the decision to send negotiators back to Athens, officials said there were still differences over venues and access to staff and ministries. The health and labour ministries are resisting opening themselves to bailout monitors, although the government accounting office — which tracks all national accounts and is seen as a crucial source of reliable figures on the state of Greece’s finances — will now be accessible.

Because of differences over the venue for talks, the Greek central bank, which is a short walk from the finance ministry and other government buildings near central Syntagma Square, has offered to host negotiations if logistical issues cannot be ironed out.