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 Greek Finance Minister Yanis Varoufakis faced a harsh morning in
which euro zone ministers bemoaned talks they felt "were going
nowhere" and one minister said that maybe it was time governments
prepared for the plan B of a Greek default.
Jeroen Dijsselbloem, the Dutch finance minister who chaired the
meeting in the Latvian capital, slammed the door on Varoufakis'
proposal for early cash after partial reforms.
"A comprehensive and detailed list of reforms is needed,"
Dijsselbloem told a news conference following a meeting in Riga. "A
comprehensive deal is necessary before any disbursement can take
place ... We are all aware that time is running out."
He also said a remaining 7.2 billion euros in frozen bailout funds
would no longer be available after June, and Greece's creditors
would not talk about longer term funding and debt relief until
Athens concluded a full interim agreement.
In a sign of the euro zone's frustration, the discussion on Greece
lasted little more than an hour, while ministers declined to go into
any detail over issues such as the budget surpluses Athens might
target because Greece had no details prepared.
 Greek Prime Minister Alexis Tsipras said after meeting German
Chancellor Angela Merkel in Brussels on Thursday he hoped for an
agreement by the end of this month and Merkel on Friday reiterated
her call for a deal soon.
But Dijsselbloem said finance ministers would review progress again
only on May 11 - a day before Greece has to make a crucial and
uncertain 750 million euro payment to the International Monetary
Fund.
European Central Bank President Mario Draghi said the ECB would go
on allowing emergency lending to Greek banks as long as they were
assessed as solvent. But he cautioned that soaring Greek government
bond yields were diminishing the value of the collateral that the
banks present to get funds.
Facing a wave of deposit outflows, the banks are staying afloat with
75.4 billion euros in emergency liquidity assistance from the Greek
central bank. But criticism of the lifeline is growing inside the
ECB, central bank sources say, and it would be in doubt if Greece
missed a payment to its creditors.
European Economics Commissioner Pierre Moscovici said despite some
progress in recent days, international creditors were still nowhere
near an agreement with Athens.
"Our message today is very clear: We need to accelerate, we need to
accelerate from today ... there is no other choice if we want to
reach the goal that everyone shares, which is a stable, prosperous
Greece anchored in the euro zone," Moscovici said.
 Varoufakis sought to play down the differences, saying ministers had
agreed to speed up the negotiations, which have also been delayed by
Greece's insistence that EU/ECB/IMF teams avoid lengthy stays in
Athens for fear of intensifying the popular backlash against the
hated "troika".
"We agreed that an agreement will be difficult but it will happen
and it will happen quickly because that is the only option we have,"
he told a separate news conference. He later said he was willing to
find a compromise, warning of the huge cost to the euro zone if
Greece were to default.
CONCESSIONS
Before the tense meeting, Varoufakis offered some concessions in an
effort to secure new funding before Athens runs out of money, saying
in a blog post he was open to some privatizations and to a
commission to supervise tax collection that would be independent of
the government.
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But he rejected any more wage or pension cuts and said creditors
must agree on a realistic target for the primary budget surplus
before debt service. "Our government is eager to rationalize the
pension system (for example, by limiting early retirement), proceed
with partial privatization of public assets, ... create a fully
independent tax commission," Varoufakis said.
Greek officials say they are aiming for a primary surplus of 1.2 to
1.5 percent of gross domestic product this year, well below the
goals of 3 percent in 2015 and 4.5 percent in 2016 set in Greece's
2012 EU/IMF bailout program.
French Finance Minister Michel Sapin told Reuters there was room for
maneuver on Greece's primary surplus, "as long as it remains
positive."
Exactly when Greece's cash reserves run out is unclear, but sources
familiar with the matter said Athens would struggle to meet the IMF
payment, and it was not certain to scrape together a targeted 2.5
billion euros from state entities' idle cash.
Merkel appeared to send a signal of goodwill after her meeting with
Tsipras on Thursday, telling reporters "everything must be
undertaken to prevent" Athens running out of cash.
But the tone of finance ministers was tougher, in a clear effort to
dramatize the stakes and force the novice Greek government to accept
unpopular measures it had resisted such as pension and labor market
reforms. Negotiations have been largely fruitless since radical
leftists won power in Athens in January on a promise to reverse
austerity and renegotiate Greece's 240-billion euro bailout package.
EUROPE SAFER
The impact of a potential Greek default is the biggest risk to the
euro zone's economic recovery after a long crisis from which the
19-nation currency area is finally emerging.
Unlike at the height of the crisis in 2011-12, economists believe
the euro zone is far better placed to withstand any Greek default
because the currency bloc has its own bailout fund, support from the
European Central Bank and a banking union that can protect banks
from crisis fallout.
"The risk of contagion exists, but it is much lower than it was
before," Standard & Poor's Chief Economist Jean-Michel Six told
Italian financial daily Il Sole 24 Ore.
The lack of progress is starting to hurt Tsipras' popularity and
that of his government. Varoufakis warned in his blog against
pushing Greece too hard, saying the Greek people would not support
more spending cuts after one of the deepest recessions in Europe
since the 1950s.
(Reporting by Jan Strupczewski, Robin Emmott, Ingrid Melander,
Lefteris Papadimas,Tom Korkemeier, Gederts Gelzis, Francesca
Landini; Editing by Paul Taylor and Giles Elgood)
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