The European Union offered Greece funds Friday to deal with what it called a humanitarian crisis after the new prime minister Alexis Tsipras vowed to clarify bailout reform pledges demanded by creditors. After crisis talks between Tsipras and European leaders, EU Commission chief Jean-Claude Juncker said he was making available 2.0 billion euros ($2.16 billion) in unused EU development funds to Greece.
Tension has mounted between Athens and Brussels since radical leftist Tsipras was elected in January promising to cut back on five years of austerity and renegotiate Greece's debt arrangements.
Greece has been lobbying for Brussels to release the last tranche of its EU-IMF bailout to help it make payments to creditors and avoid bankruptcy and a possible exit from the euro. "Greece confronts a serious social problem, a humanitarian crisis," Juncker told a press conference after a European summit whose other agenda items were largely eclipsed by the Greek crisis.
"This will not be used to fill Greece's coffers, but to support efforts to create growth and social cohesion in Greece."
Tsipras promised on Thursday to speed up reforms and provide a new list of measures to Greece's creditors in coming days, following late night talks with leaders of Germany, France and the EU institutions.
"As soon as this procedure is in place, a gradual disbursement of funds will be possible," Tsipras told reporters in Brussels.
European finance ministers may meet as soon as next Friday to discuss Greece's new list of reforms.
Tsipras sought to play down fears that Greece could run out of cash to pay debts and government employees within days, insisting that Greece had "no problem with liquidity in the short term."
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.
Brussels in February gave the Greek government until April to reach agreement with its creditors to unlock the final seven billion euro tranche of its 240-billion-euro ($255-billion) bailout.
But frustrations have grown on both sides over what Brussels sees as Athens dragging its feet, while Athens says its creditors are trying to force it into abandoning its radical programme.
"Greece will not be forced into recessive measures," Tsipras added.
German Chancellor Angela Merkel has led European efforts to keep up the pressure on Athens, which has been locked in a war of words with pro-austerity Berlin since Tsipras came to power.
She said however it was possible for Greece to get some funds before the end of the bailout. "If they finish earlier then of course after fulfilment of all obligations it is possible to pay earlier," she said.
Rows over Tsipras's demands for German reparations for World War II have also added to the bitterness of the dispute over Greece's debts.
Technical talks in Athens and Brussels in recent weeks meanwhile stalled amid reports that the Greek officials were being uncooperative in handing over budget data.
Greece has pushed ahead with measures that Brussels disapproves of, with parliament on Wednesday approving a "humanitarian crisis bill" to help the poorest in society.
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.
But Greece still faces critical funding needs in coming months. Overall, Greece must repay some 15.5 billion euros in bonds and loans by August, the debt management agency told parliament this week.
Five years of debt crisis have seen Greece receive two international bailouts and implement tough austerity measures, only to see its economy collapse and unemployment and poverty soar.
The latest talks with its creditors have dragged since September, interrupted in December as the country headed into an early election that was won by the hard-left Syriza party in January.
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