Greece says reaches draft accord with euro zone creditors on loan

var_dijsEuro zone finance ministers drafted an outline agreement on Friday that could form the basis for extending Greece’s financial rescue package, officials on both sides said.

However they stressed there was no formal deal on a common text in the full 19-nation Eurogroup of ministers.

European Union paymaster Germany, Greece’s biggest creditor, had demanded “significant improvements” in reform commitments by the new leftist government in Athens before it would accept a six-month extension of euro zone funding.

“There is an initial agreement on a joint draft text among the institutional partners, which is now being presented to all of the ministers,” a Greek government official said following preparatory talks involving the Greek and German ministers, as well as the managing director of the IMF.

“Details may be defined later. But let’s see.”

With the 240 billion euro EU/IMF bailout program due to expire in little more than a week, Prime Minister Alexis Tsipras voiced confidence of an agreement despite the objections to the request made in a letter to Dijsselbloem.

“I feel certain that the Greek letter for a six-month extension of the loan agreement with the conditionalities that accompany it will be accepted,” Tsipras said in a statement to Reuters hours before the crucial Brussels meeting.

A report by German magazine Der Spiegel that the European Central Bank was making contingency plans for a possible Greek exit from the currency area if the talks fail, on which the ECB declined comment, highlighted the high stakes.

German Chancellor Angela Merkel, speaking after talks in Paris, said all EU partners wanted to keep Greece in the euro but added: “There is a need for significant improvements in the substance of what is being discussed so that we can vote on it in the German Bundestag, for example next week.”

The Greeks won sympathy from Italian Prime Minister Matteo Renzi. “I believe that the principle of doing reforms in exchange for more time is just and correct,” he said after a meeting of his government in Rome.



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