Greek creditors return in urgent bid for bailout cash

Greece's creditors resume a long-delayed audit Tuesday in an urgent bid to unlock billions of euros in bailout loans needed for a looming July payment deadline.

Athens and its creditors -- the European Commission, European Central Bank and the International Monetary Fund -- managed to iron out differences on additional fiscal cuts, to restart the talks that had been interrupted in March.

But disagreements remain on labour rights and the partial privatisation of Greek near-monopoly electricity provider PPC -- both thorny issues for the leftist-led government of Prime Minister Alexis Tsipras.

"Talks are to begin tomorrow and are expected to last several days," European Commission spokesman Margaritis Schinas told a daily briefing on Monday.

Greece and its creditors agreed a third, 86-billion-euros bailout deal in July 2015.

But the International Monetary Fund has so far refused to take part after two prior programmes on the grounds that the targets were unrealistic and Athens' debt mountain unsustainable.

A senior IMF official said on Friday that it was "urgent" to reach a new agreement on the bailout programme, the latest payment of which has been held up by the row between Greece and its creditors.

Under pressure from its creditors, Athens earlier this month accepted to reduce pensions in 2019 and lower tax breaks in 2020.

- Cuts worth 4 bn -

According to reports, the total package of cuts over two years is worth around four billion euros (4.3 billion dollars).

The announcement of some positive fiscal figures should help the talks.

Athens last week said it had registered a primary surplus of 4.19 percent of GDP in 2016, a figure confirmed by EU statistics agency Eurostat earlier this week.

That's over eight times the intended target, though critics note it was partly achieved by not paying Greek state providers.

Under the bailout, Greece needed to clock a primary surplus of 0.5 percent of output in 2016, followed by 1.75 percent this year and 3.5 percent in 2018.

The eurozone is confident that Greece can deliver a primary surplus of 3.5 percent of GDP in 2018 but the IMF has said only 1.5 percent is feasible.

The IMF also needs more clarification from Europe on how it will implement promised debt relief for Greece, he said.

Last week, the Greek statistics agency said the nation's debt in 2016 stood at nearly 315 billion euros or 179 percent of output, up from 177.4 percent in 2015.

If these two issues are resolved, the IMF has said it will be able to participate financially in the aid plan, as it did in 2010 and 2012.

In an article published in the Wall Street Journal last week, PM Alexis Tsipras said the EU-IMF squabble was holding back Greek recovery.

"We have committed to fulfilling the obligations undertaken to our creditors despite the political cost," Tsipras said.

"But the safest way to ensure this is by boosting growth and ending the punishing policies of the past," he said.

Additional debt relief for Greece has proved a contentious point for many of its European creditors including Germany, where additional concessions are unpopular with an electorate called to ballots later this year.

A compromise is required to sign off on a second review of the bailout programme and unblock a tranche of loans Greece needs for debt repayments of seven billion euros in July.