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Greece, lenders still divided, bailout talks to intensify: Dijsselbloem

Reuters

BRUSSELS (Reuters) - Greece and its euro zone creditors are still at odds over reforms required before new loans can be disbursed to Athens, the head of euro zone finance ministers said on Monday after an inconclusive meeting in Brussels.

"Some key issues" still remain to be sorted out, Jeroen Dijsselbloem told a news conference after the meeting.

"The outcome of today's meeting is that we have agreed talks will continue and will intensify in coming days in Brussels," Dijsselbloem said, giving no date for a possible deal.

The next regular meeting of euro zone finance ministers is on April 7, he added: "But there is no promise all the work will be done by then."

Greece and its euro zone lenders still need to agree on tax, pension and labor market reforms, Dijsselbloem said, noting there has been some progress in the discussions.

Once there is agreement on the reforms, euro zone ministers can start discussing the sustainability of Greek public finances in the future -- how big the country's primary surplus has to be and for how many years and whether Athens should get more debt relief once it finishes all the bailout reforms in 2018.

Such a comprehensive deal would then pave the way to unblock new loans to Greece, without which the country could have problems servicing its debts when large repayments come in July.

It would also pave the way for the International Monetary Fund to join the latest Greek bailout, now shouldered by euro zone governments alone.

The participation of the IMF is an important condition for the German and several other euro zone parliaments to continue with aid to Athens, because they see the Fund as a guarantee of impartiality and expertise.

But the IMF insists on debt relief for Greece, which Germany opposes, and wants a deeper overhaul of the Greek pension system which it says now doubles up as an unemployment benefit scheme.

The IMF also says that if Greek public finances are to be sustainable the country has to increase the number of people paying income tax because now half of all wage earners are exempt from it. Both reforms are strongly opposed by Greece.

(Reporting by Francesco Guarascio; Editing by Alastair Macdonald and Ken Ferris)