Athens rejects bailout reforms beyond those agreed so far

Greece will not implement reform measures beyond those agreed at an emergency summit earlier this month, prime minister Alexis Tsipras has said, amid signs Greece's creditors may demand further reforms before disbursing funds ahead of an August 20th deadline.

Officials from the European Commission and European Central Bank have been in situ in Athens since Monday, with the International Monetary Fund's mission chief due to arrive by tomorrow, as negotiations continue on a third bailout package for Greece.

Bridge loan

With Greece due to repay approximately €3.2 billion to the European Central Bank on August 20th, both sides are under pressure to agree a memorandum of understanding in the next three weeks. If not, Greece may need another bridge loan to make its next payment to the ECB.

The European Commission yesterday denied reports of tensions between the two sides in the negotiations, reporting “constructive co-operation” between the troika and the Greek authorities this week.

Meanwhile IMF managing director Christine Lagarde reiterated her call for Greece's debt burden to be reduced. "For Greece to have success and any programme to fly, a significant debt restructuring should take place," she said in Washington.

Following months of acrimonious negotiations, Greece agreed to a third bailout package worth more than €80 billion after all-night talks in Brussels earlier this month.

While the bailout agreement did not contain specific targets on primary surplus figures, creditors have consistently demanded a primary surplus as a key condition for aid. Given the deterioration in the Greek economy over the last few months, it is virtually certain its key economic indicators will fall far short of predictions.

In an interview on Greek radio yesterday, Mr Tsipras said the primary budget balance before debt service would at best break even, but could show a deficit this year, though he insisted Greece would only implement reforms as set out in the July 13th agreement.

Mr Tsipras, who is facing continuing criticism from within his own party about the terms of the bailout package, will face fellow Syriza members at a key meeting of the party today. Yesterday, he criticised the dissenters, accusing them of trying to “manipulate” last month’s referendum result.

“The Greek people voted No to a bad deal, they did not vote for an exit from the euro,” he told Greek radio, adding that he would not be “blackmailed”.

He said he had “no regrets” about how he handled the Greek crisis over the last five months, arguing that Greece was now front-page news and had been presented in “a positive light”.

Criminal charges

Recriminations over the decision to sign up to a third bailout continued this week amid reports that former Greek finance minister

Yanis Varoufakis

could face criminal charges about plans to establish a parallel banking system while he was finance minister.

Meanwhile, the ECB reportedly left its provision of emergency funding to Greek banks at just under €91 billion during its regular conference call on the liquidity situation yesterday. The ECB raised the emergency liquidity assistance cap by €900 million last week.

Capital controls, which were first introduced on June 28th, remain in place in Greece.