EU deal on reforms, loans next week: Greek minister

[ATHENS] Greece's economy minister on Thursday said the country would next week reach a long-awaited accord with its creditors providing funds vital to avert a state default.

"I think at the beginning of next week we will have a deal, both over the reform package proposed by the Greek government, and over the flow of funding," Giorgos Stathakis told Antenna TV.

Greece's new radical left government is in a race to reach an accord with its EU-IMF creditors by next month before state coffers run dry.

The radicals, who came to power in January pledging to roll back unpopular austerity reforms, have received none of the money remaining in Greece's 240-billion-euro (S$359 billion) bailout until it can table a credible alternative reform plan.

Athens faces a heavy repayment schedule from June onwards, with over 6.8 billion euros due in July alone.

Greek banks were until now the main source of financing for the government, but the European Central Bank has restricted their ability to purchase short-term debt known as treasury bills, the main instrument used by Athens for emergency financing.

This week, the ECB explicitly urged Greek banks to avoid increasing their exposure to Greek sovereign debt.

And the government on Wednesday also failed to persuade European officials to return 1.2 billion euros which it says was unduly returned to the eurozone's bailout fund.

The Financial Times on Tuesday reported that the government had drawn funds from state corporations to meet its financing needs.

The finance ministry did not immediately comment on the report.

Last month, European officials gave Greece until April to come up with an alternative reform plan.

The government has pledged to submit a detailed list by Monday.

Greek officials are hopeful that talks between Prime Minister Alexis Tsipras and German Chancellor Angela Merkel earlier this week have improved chances of a breakthrough.

"After the talks, the political climate is excellent," Mr Stathakis said.

AFP