European Commission plays down hopes of a Greek deal by Sunday

The European Commission has played down hopes of a Greek deal by Sunday, warning that “more progress” is needed before an agreement can be reached.

Speaking in Brussels this lunchtime a European Commission woman said that negotiations resumed between Greek officials and representatives of the European Commission, European Central Bank and IMF on Wednesday night and would continue in the coming days.

“We’re not there yet. There are open issues that need to be resolved,” the spokeswoman said.

The message from Brussels was echoed by IMF managing director Christine Lagarde on the fringes of a meeting of G7 finance ministers in Dresden, at which the Greek standoff is expected to be discussed.

“We are all in the process of working towards a solution for Greece and I would not say that we already have reached substantial results,” Lagarde said. “Things have moved, but there is still a lot of work to do,” she said, adding that she believed Greece would fulfil its commitments.

Earlier, a Greek government spokesman said the government aims to reach an agreement with its lenders by Sunday.

“The Greek team is in Brussels with the aim of concluding the deal within the coming days,” he told a news conference in Athens. “We are coming to these negotiations with the aim to have a deal with the partners by Sunday.” Asked about the European Commission’s apparent pessimism about reaching an imminent deal, the spokesman suggested that the comments could be a tactic to exert pressure on Athens.

“Certainly, statements that do not share the optimism of the Greek government fall into the broader framework of negotiations and are possibly pressure on the Greek side to make more concessions,” he said.

Four months after the Greek general election returned a Syriza-led government to power, Greece is locked in negotiations with lenders about a new bailout package.

In an interim agreement signed off by the eurogroup in February, Greece was given until the end of June to reach an interim agreement, before a more long-term arrangement would be agreed. But with the Greek government struggling to make wages and pensions payments, the government is under pressure to unlock up to €7.2 billion of bailout funds due to it under the terms of its outstanding bailout. Greece also faces IMF repayments of €1.5 billion in June, including a payment of around €300 million on June 5th. The Government was forced to tap its reserves at the IMF to meet its most recent repayment to the fund earlier this month.

Greek Prime Minister Alexis Tsipras held a two-hour meeting with German Chancellor Angela Merkel and French President Francois Hollande on the fringes of last week's Eastern Partnership Summit, but the Greek leader failed to gain any leeway from the euro zone's two largest economies on a swift conclusion to the discussions.

Striking a more optimistic note, European Commission president Jean-Claude Juncker said earlier this week that there was a growing sense that a Greek exit from the euro area would be averted.

“My impression after talking to a series of colleagues is that the feeling is growing that a default should be avoided,” Juncker told news agency Market News.

Among the issues of contention between the Greek side and the lenders are changes to the pension system and VAT.