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UPDATE 1-Lenders do not confirm preliminary deal on Greek bailout
March 29, 2017 / 11:05 AM / 8 months ago

UPDATE 1-Lenders do not confirm preliminary deal on Greek bailout

(adds quotes from ESM spokesman)

BRUSSELS, March 29 (Reuters) - Greece’s lenders on Wednesday could not confirm what sources said was a preliminary deal on open issues of the country’s bailout and said possible debt relief measures will be decided only at the end of the financial aid programme, contrary to Athens’ will.

Negotiations between Greece, the European Union and the International Monetary Fund - which has yet to decide if it will participate in Greece’s current bailout - have dragged on for months, rekindling fears of a new financial crisis in the euro zone.

Sources close to the talks said earlier on Wednesday that Greece had reached an agreement with its lenders on some of the main issues on the table, including labour reforms, spending cuts and energy issues, moving closer to clinching a deal before a meeting of euro zone finance ministers on April 7 .

But a Commission spokeswoman told a regular news conference the EU executive could not confirm those reports. Two other EU officials said that no preliminary deal had been reached yet.

The main focus of the talks have been pension cuts, energy and labour reforms. Those additional measures, worth 2 percent of GDP, would help convince the IMF to participate in the bailout, as demanded by EU countries including Germany.

In an earlier statement, a spokesman for the European Stability Mechanism, the euro zone’s bailout fund, had said that possible additional debt relief measures for Greece could be decided only at the end of the bailout programme, contrary to Athens’ hopes of an earlier deal to reduce its huge debt.

“We will determine at the end of the programme in August 2018 whether medium term measures are needed to ensure debt sustainability,” the ESM spokesman said.

The spokesman reiterated that the possible measures could include the extension of maturities and possible interest rate deferral, but not the capping of interest rates. (Reporting by Francesco Guarascio; Editing by Alison Williams)

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