Greece starts bailout talks as hopes rise

Greece began tough negotiations with its creditors on Friday as hopes grew of a deal to replace its detested bailout after new Prime Minister Alexis Tsipras pushed his case at a European summit.
Officials from Athens held technical discussions with the EU, International Monetary Fund and European Central Bank in Brussels ahead of a last-ditch meeting of eurozone finance ministers on Monday.
European and Asian stock markets rose Friday on the more positive mood after hard-left leader Tsipras met German Chancellor Angela Merkel, the leader of Europe's biggest economy, and other counterparts in Brussels.
Tsipras vowed after his election in January to replace the current 240-billion-euro ($270-billion) EU-IMF bailout with its heavy austerity measures, and to ditch the so-called troika of its creditors.
But with the Greek rescue programme due to expire at the end of the month, time is running out to prevent a possible Greek default and a potentially catastrophic exit from the 19-country eurozone.
A senior EU official closely involved in Friday's technical-level talks said that a new bailout programme was an option, despite the insistence of Greece's eurozone counterparts until now that Athens stick to the current rescue package.
"It is not crucial to extend. One could also agree that one will commence discussions on a new programme," the EU official said on condition of anonymity. "I would not exclude it."
- Cautious optimism -
While the Greek negotiators are meeting the same group of creditors they have vowed to abandon, the EU official also raised the possibility of a new format, or at the very least a new name for the group.
"There is no desire on anybody's part necessarily to call it the 'troika'," he said.
There was cautious optimism on Friday in Greece, which has suffered from the harsh austerity measures imposed under the international bailouts that have kept it from bankruptcy since 2010.
Greek stocks were up 4.65 percent, even though new data showed Greece's recovery from recession stalled in the last quarter of 2014 amid the political crisis that led to Tsipras's election and the ouster of the conservative government.
"Bridge of dialogue," wrote centre-left Ethnos daily while liberal Kathimerini saw a "window of opportunity for compromise."
But the new Greek government warned against premature celebration.
"We don't want to spread enthusiasm before the deal is done," government spokesman Gabriel Sakellaridis told Antenna TV. "Greeks should understand that this is a critical and difficult negotiation, the pressure is enormous."
In the face of tough opposition from Germany, as well as other former bailout countries like Ireland and Portugal that do not see why Greece should get an easy ride, Tsipras had taken a tough tone after his first European summit
"Greece will not blackmail or be blackmailed," he said.
But the rhetoric appeared to mask some compromise, as he said that he discussed the possibility of a six-month bridging programme to give Greece time to work on a different programme that would be acceptable to its creditors.
- Merkel suggests compromise -
Merkel, Europe's queen of austerity, suggested at the summit that a "compromise" was possible and spoke of a "friendly" encounter with Tsipras, during which they shook hands in front of the cameras.
It was all a far cry from a bad-tempered meeting of eurozone finance ministers the day before, which broke up without even issuing a joint statement on the way ahead.
In Brussels on Friday, negotiators were poring over Greece's plans to "show where there are areas of overlap and areas of underlap" with its creditors before Monday's eurozone meeting.
Next week with the eurozone meeting on Monday is seen as the crucial time for a deal otherwise there will be little time to get any compromise passed by eurozone countries' parliaments.
Under the Greek proposals, Athens would stick to 70 percent of the bailout programme but it would overhaul the remaining 30 percent which it sees as damaging to growth and toxic for ordinary Greeks.
Athens also proposes debt swaps based on economic performance as the Greek economy moves out of recession.
But Europgroup chief Jeroen Dijsselbloem said Friday he is "pessimistic" about reaching any quick deal with Greece.
"The Greeks have sky-high ambitions. The possibilities, given the state of the Greek economy, are limited," said Dijsselbloem, who is the Dutch finance minister.
"I don't know if we'll get there by Monday."