Greece continues talks on aid, deal unlikely on Sunday: sources

ATHENS (Reuters) - Greece and its creditors were continuing talks on a cash-for-reforms deal but are expected to miss a self-imposed Sunday deadline for reaching an agreement to unlock aid, sources close to the talks said.

Athens and its euro zone and International Monetary Fund (IMF) creditors have been locked in talks for months without luck on a deal. Pressure to strike one has intensified as Athens faces a debt payment on June 5 as well as the expiration of its bailout program on June 30.

The government said this week it was looking for a deal by Sunday, but sources close to the talks at the so-called Brussels Group of EU/IMF creditors said that was unlikely.

"Brussels Group talks will continue today, in the evening. Although we don't expect a deal today we are very close," a Greek government official said on condition of anonymity.

Another source close to the talks said the major issues holding up a deal remained. It was not immediately clear if the talks would continue in Brussels on Monday.

In an interview published in newspaper Corriere della Sera on Sunday, Greek Economy Minister George Stathakis said he expected a deal in "a few days", followed by a meeting of euro zone finance ministers to approve disbursement of the aid.

Asked whether the debt payment to the IMF on June 5 was at risk and there was a question of lumping it together with other installments that fall due next month, Stathakis said: "There shouldn’t be any need. No danger."

Athens has frequently said it is on the verge of a deal in recent weeks but international lenders have been less optimistic, citing Greece's resistance to labor and pension reforms that are conditions for more aid.

In a sign of greater willingness to compromise, Interior Minister Nikos Voutsis said on Saturday that Greece was open to pushing back parts of its anti-austerity program to reach a deal this week..

Greek Prime Minister Alexis Tsipras chaired an eight-hour meeting of ministers involved in negotiations on Saturday which took stock of the progress made in talks with the lenders.

Tsipras is expected to have a teleconference with German Chancellor Angela Merkel and France's President Francois Hollande later on Sunday - his second in four days - in a bid to help close the deal, a Greek government official said.

Tsipras has long sought a political push to end negotiations and get aid flowing to his cash-strapped country, though the lenders have insisted that Greece must wrap up talks at the technical level with adequate concessions on reforms so that its budget and debt numbers add up.

Merkel and Hollande are also expected to meet Juncker at a business event in Berlin on Monday that could provide a chance to discuss Greece.

 

(Writing by Angeliki Koutantou and Deepa Babington, additional reporting by Stephen Jewkes in Milan; editing by Susan Thomas)