July 11, 2015 / 10:04 AM / 4 years ago

Euro zone not certain to agree Greek bailout: sources

(Reuters) - Euro zone finance ministers meeting in Brussels on Saturday have serious doubts about Greece’s request for a bailout and a deal to start negotiating on the basis of Athens’ proposals is far from certain, sources close to the talks said.

Greek Prime Minister Alexis Tsipras reacts during a voting session at the Parliament in Athens, Greece, July 11, 2015. REUTERS/Christian Hartmann

Overnight, the European Commission, European Central Bank and International Monetary Fund gave a positive assessment of the cash-for-reforms plan put forward on Thursday by Greek Prime Minister Alexis Tsipras, according to EU officials.

France, Greece’s most powerful ally in the Eurogroup of finance minister, also welcomed the proposals on Friday, raising expectations that ministers would agree to open negotiations over the weekend. That could avert bankruptcy and prevent Greece running out of euros and falling out of the currency bloc.

But Germany and other governments have remained skeptical and two euro zone sources said on Saturday that the demands for new financing from Athens had alarmed some Eurogroup members.

One source, who told Reuters that he was almost certain late on Friday that a deal would be agreed on Saturday, said he was now not so sure, four hours before ministers meet at 1300 GMT.

Senior officials in the Euro Working Group were still in talks in Brussels on Saturday morning to prepare the Eurogroup.

“The high figures for financing needs over the next three years may be too high and too sudden,” the first source said.

The second said he now put the chances against reaching a deal in the Eurogroup meeting to open negotiations at 60-40.

The sources said experts reckoned that Greece, which asked for a three-year credit from the euro zone’s European Stability Mechanism of 53.5 billion euros, would need 82 billion euros to meet its obligations. It could hope for some 16 billion still due from the IMF before March and could also hope to receive nearly 8 billion in other EU funding that it lost its claim to when it failed to complete an earlier bailout deal last month.

However, further funding from the IMF would depend on euro zone governments offering Greece substantial debt relief, the first source said — something Germany has been very wary of.

A German Finance Ministry spokesman declined comment on a Bild newspaper report that Finance Minister Wolfgang Schaeuble, disenchanted with Greece’s presence in the euro, saw Tsipras’s proposals as inadequate and opposed opening new talks.

“The minister will this afternoon discuss with his euro zone colleagues the assessment of the institutions,” the spokesman said. “The result of the discussion is completely open.”

Germany has been the biggest contributor to two previous bailouts worth 240 billion euros to Greece since 2010.

Writing by Alastair Macdonald in Brussels; Editing by Andrew Heavens

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