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Greece in new race against time to get bailout on track

John Hadoulis
A derlict building adorned with graffiti and slogans reading 'Euro' in central Athens on March 19, 2015

Greece was in a new race against time on Friday to get its EU-IMF bailout on track, with its international creditors pushing for a clear reform pledge.

The two-month-old radical government of Prime Minister Alexis Tsipras has until April to reach agreement with its creditors, but its cash reserves are running dangerously low.

Late on Thursday, European leaders said they had agreed with Greece to finish work "as fast as possible" to unblock loans helping Athens to avoid bankruptcy and a catastrophic exit from the euro.

"We have put the process back on track," Tsipras said after talks with Chancellor Angela Merkel, President Francois Hollande and the EU's top officials on the sidelines of a summit in Brussels.

"Greek authorities will have the ownership of the reforms and will present a full list of specific reforms in the next days," said a statement issued after the talks.

France's Hollande urged Greece "to be more precise in its reform proposals and introduce them faster than planned."

Greece's new government, which intends to eliminate austerity, made a pledge in February to present alternative reforms to its creditors by April.

But technical talks in Athens and Brussels largely stalled amid reports that the Greek officials were being uncooperative in handing over budget data.

The Greek finance ministry on Friday said it was expecting a "detailed list" from EU-IMF technical teams on their data requirements.

"We look forward to receiving the document when it is ready, and will review and respond to it in the same constructive spirit," the ministry said.

In past weeks, the Greek government has released several reform lists but without citing the possible cost of the measures, a crucial point for the country's creditors.

Government spokesman Gabriel Sakellaridis said Athens would now add "a specific timetable and greater clarity" to its pledges.

In a series of TV interviews, Sakellaridis added that the reforms would be about "tax management, public administration, boosting the business environment and faster justice."

Greece has received no money this year from its ongoing 240-billion-euro ($256-billion) bailout as reforms talks with its creditors have dragged on since September.

They were interrupted in December as the country headed into an early election that was won by the radical Syriza party in January.

Athens wants the European Central Bank to hand over 1.9 billion euros in profits it made from buying Greek bonds, as it has done previously.

Greek daily Ta Nea on Friday said Athens has also requested permission to raise an additional 5.0 billion euros in short-term debt instruments known as treasury bills.

Greek banks are currently restricted by the European Central Bank from participating in such debt issues, which are a key source of income for the cash-strapped Greek government.

- Bills paid Friday -

On Friday, Athens paid out some 2.5 billion euros to the International Monetary Fund and treasury bill holders, a source with knowledge of the transaction said.

Some 348.5 million euros were handed back to the IMF. Overall, Greece has repaid 1.5 billion euros to the global lender this month.

Another 1.6 billion euros went into redeeming treasury bills.

Overall, Greece must repay some 15.5 billion euros in bonds and loans by August, the debt management agency told parliament this week.

European alarm and frustration mounted after the Greek parliament adopted a crisis bill aimed at helping the poor on Wednesday, which lenders say violated its commitments to creditors.

Tsipras warned earlier that Greece faced a "humanitarian crisis" if it did not get some of the cash it says is owed to it under the bailout programme that started in 2012.

Athens on Friday plans to vote on another potentially controversial bill that grants partial debt forgiveness to people owing money to the state, in order to help recoup some of the funds.

The Greek state is owed 76 billion euros in unpaid taxes and social insurance contributions by individuals.

Just a fraction from that total can realistically be recovered according to the finance ministry.