Greece made little headway in negotiations on Wednesday toward ending its standoff with its international creditors, leaving the government facing the prospect of at least another month without new financing and starved for cash.
Athens handed over a more detailed plan for revising its bailout program to the eurozone and the International Monetary Fund, its latest bid to unlock bailout lending while rewriting the program as promised by the country's antiausterity government. The 26-page plan, discussed on a conference call Wednesday with senior eurozone finance officials, proposes a suite of measures to raise new revenue, such as new value-added taxes and fighting tax evasion.
But it also proposes new spending on pensions and other government programs. Those proposals, among others, are red lines for Greece's creditors and drew swift rebukes from eurozone officials.
The list is a "very long way from being a basis [for a deal]," a eurozone official said. "They should negotiate in competence and good faith with the institutions first, and then we will see."
The talks come as Greek officials said the government might repay the IMF late, rather than deprive the domestic economy of cash. "If there is no disbursement [of bailout aid], not even a small one, we might delay the IMF repayment," a senior government official said.
Greece's new government since January--an alliance of the radical-left Syriza party and the right-wing nationalist Independent Greeks--is performing a barely possible balancing act. Elected to end Greece's onerous bailout and austerity program, which was blamed by voters for the country's economic depression since 2010, the coalition needs more financing to avoid a debt default and an exit from the eurozone.
But the creditors insist aid will flow only in return for completing the very economic overhauls that Syriza rejects.
This week's talks seek to find a common ground on Greece's economic policies. But the list of proposals defy the creditors' demands for more pension cuts and fewer labor protections. Greece has yet to offer more detail on other issues such as taxation. Officials also said the government's economic-growth projection for this year of 1.4% is too optimistic.
"There's no meat in it really," another eurozone official said. "It still remains nowhere near as detailed as it needs to be."
Greek officials said the country urgently needs cash from its creditors, or it might not be able to meet looming debt repayments. European officials said Greece isn't showing a corresponding urgency in the talks on economic policies and expressed doubts that the country is really on the brink of running out of money.
Among its near-term debt burdens, Greece must repay IMF loans of about EUR460 million ($495.5 million) on April 9 and about EUR770 million on May 12. Maturing treasury bills in the next two months also create a challenge because foreign investors are increasingly unwilling to buy new issuance and Greek banks have been ordered by the eurozone banking supervisory authority not to increase their exposure.
Athens' predicament resembles an elastic band rather than a ticking clock, according to many officials and analysts. The government can make ends meet for some time by stretching out its payments to domestic suppliers to the public sector, as well as other public-spending items. But at some point, that approach could snap if political support for prioritizing the servicing of foreign debt breaks down.
Much depends on how tax revenue performs. So far, the government has managed to keep outlays other than debt service below revenues. The Greek finance ministry is hoping that a new regulation that motivates Greeks to repay tax debts in installments will generate significant funds quickly. In the eight days since coming into force, the measure has raised EUR148 million, ministry officials say.
To keep meeting payments, the government has scraped together all the cash reserves it could find around the public sector. Since February, it has taken over or borrowed at least EUR1.2 billion from entities, such as the central bank and the country's job centers. About EUR500 million of reserves from other state bodies are left to tap, according to officials.
Amid the tense negotiations, the European Central Bank on Wednesday raised the amount the Greek central bank can lend its banks to EUR71.8 billion from EUR71.1 billion the previous week, according to a Greek bank official extending a lifeline for the country's banks.