Greece denied fresh bailout funds amid eurozone-IMF spat

Greece's parliament passed a fresh round of austerity measures last weekReuters

Eurozone finance ministers have failed to reach a deal on providing debt relief to Greece, delaying the release of fresh bailout funds to the debt-stricken state.

But Eurogroup chief Jeroen Dijsselbloem said at a press conference in the early hours of 23 May that creditors were "very close" to reaching an agreement.

Greece's parliament passed a fresh round of pension cuts and tax increases last week in order to unlock a tranche of €7bn (£6.1bn) in aid that it needs to fulfil debt obligations in July.

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However, creditors have also demanded a series of economic reforms in exchange for funds – some of which Athens is yet to complete.

There are also disagreements between Germany and the International Monetary Fund (IMF) over providing additional debt relief to Greece, which the Washington-based lender has demanded in return for its participation in the bailout.

"We have made huge progress on the policy package on which so much work had been done in the last months and on which an agreement had been reached between Greece and the institutions," Dijsselbloem said.

"A lot of work has already been done in Greece by the Greek government and they are committed to continue that work as soon as possible, so that we can work towards that next disbursement before the summer."

Greece is part way through its third bailout deal, worth €86bn. The IMF, which has long argued for Athens to be given debt relief, is not financially contributing to the bailout, despite participating in the first two rescue deals.

However, providing additional debt relief for Greece is politically unpopular in several European states, especially Germany.

"I think we are very close to that agreement," Dijsselbloem added.

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"But tonight, we were unable to close a possible gap between what could be done and what some of us had expected should or could be done."

Dijsselbloem said he expected a deal to be struck between Greece and its creditors at the next Eurogroup meeting in June.

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