ATHENS/BRUSSELS — Wide differences over pension and labour reforms continued to dog intensive talks between Greece’s government and its international creditors despite progress in other areas, as the country’s cash position becomes increasingly critical.
Government spokesman Gabriel Sakellaridis sounded the alarm on Monday, saying that while Athens intended to meet all its payment obligations, including nearly €1bn to the International Monetary Fund (IMF) this month, it needed fresh funds before the end of the month.
"Liquidity is a pressing issue," he said.
"The Greek government is not waiting until the end of May for a liquidity injection. It expects this liquidity to be offered to the Greek economy as soon as possible."
Labour Minister Panos Skourletis said the IMF, Greece’s second-biggest creditor after eurozone governments, was insisting on tough policy conditions for an interim deal to unlock frozen aid.
The global lender was unyielding in demands for pension cuts and rules to ease mass layoffs in the private sector and in its opposition to a government plan to raise the minimum wage, he said.
"They are asking us to not touch anything (of the austerity measures) that have ruined Greek people’s lives in the last five years," the minister said. "The IMF is the most inflexible side ... the most extreme voices of the Brussels Group. But there are also calmer voices."
Greece faces repayments of €970m by next Tuesday. It has been borrowing from municipalities and government entities to meet obligations.
Intensive talks on an interim deal between a reshuffled Greek negotiating team and representatives of the European Commission, the European Central Bank (ECB) and the IMF, renamed the "Brussels Group", have been under way since last Thursday.
The aim is to achieve a technical accord that would enable eurozone finance ministers to declare when they meet on Monday that there is a prospect of concluding the bail-out review successfully.
That could give the ECB grounds to permit Greek banks to buy more short-term treasury bills, easing the government’s cash crunch.
On Sunday, Greek and eurozone officials reported progress on some issues and forecast a result by Wednesday.
Mr Skourletis made it clear that social policies, which Prime Minister Alexis Tsipras’s radical Syriza party has declared "red lines", were the main stumbling block.
Mr Tsipras yielded some ground last week on privatisations and reforming value added tax when he shook up his negotiating team to sideline outspoken Finance Minister Yanis Varoufakis.
"There is more competence, more willingness to compromise," said an EU official. But to say there would be a deal by Monday was "speculation".
Greek daily newspaper Kathimerini said the ECB would consider significantly toughening the terms on which the banks received emergency liquidity by raising the "haircut" on collateral.