A man carries a luggage in central Athens on July 11, 2015.(Photo: AP)
The head of the group of eurozone finance ministers meeting in Brussels on Saturday said a "major issue of trust" still needs to be worked out before creditors can back Greece's latest bailout plan.
The group must decide whether Greece's formal proposal is sufficient to secure Athens a third bailout and prevent it from leaving Europe's euro-currency bloc.
"We are not there yet," said Dutch finance minister Jeroen Dijsselbloem, the eurozone's top official. "Both on substance and there is of course a major issue of trust. Difficult meeting."
Christine Lagarde, head of the Initernational Monetary Fund, said before the talks got underway, "We have to make a lot more progress."
The emergency talks convened just hours after Greece's parliament approved a motion for pension cuts and tax increases that may pave the way for Athens to receive $59 billion over three years as it attempts to avert bankruptcy and a complete collapse of its banking system.
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The new plan being reviewed by the 19 eurozone finance ministers alongside officials from the International Monetary Fund, European Central Bank and European Commission — Greece's creditors — resembles an offer made to Athens last week that was overwhelmingly rejected by Greek voters in a national referendum.
Several European ministers arriving for the meeting struck a guarded, skeptical tone. German Finance Minister Wolfgang Schauble, a key player in the talks, predicted "exceptionally difficult negotiations."
He said that a hopeful situation in Greece "has been destroyed in the last months in an incredible matter."
Austrian finance minister Hans-Joerg Schelling said "details are missing" in the bailout plan,
The Guardian reported. EU commissioner Valdis Dombrovskis said, however, that the sides were making progress, noting "there is a willingness on the Greek side to reach agreement."
If an agreement is reached Saturday a planned summit in Brussels with all 28 leaders of the European Union for Sunday may not go ahead. However, Italian Finance Minister Pier Carlo Padoan downplayed expectations a deal could be reached Saturday, saying the meeting was "not about striking a deal tonight."
Some of Greece's creditors have indicated the new plan is a promising basis for re-starting talks, but Athens' lenders have already lent the nation nearly a quarter-trillion dollars since 2010 and patience in some quarters, led by Germany, with Prime Minister Alexis Tsipras' leftist Syriza party is running out after a series of twists and turns in the negotiation process that has dragged on for months.
Global markets bounded higher Friday on expectations a last-minute deal would be reached. The Dow closed up 212 points. Germany's DAX index finished 2.9% higher.
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Moody's nevertheless estimated Greece's banks could run out of money by Sunday and that even if some kind of deal is reached this weekend, the country— with huge deficits and a 25% jobless rate — faces a long road back to financial stabilization.
"Regardless of a political agreement on Greece this weekend, we believe that implementation risks will still remain high and the conditions under which external finance is provided will be harder to absorb because of the political and social challenges in the country," the credit firm said in a note sent to investors on Friday.
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Contributing: Jessica Estepa
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