Brussels, May 8

Eurozone finance ministers will hold an emergency meeting on Monday to try to thrash out a difficult deal on fresh reforms for Greece as fears grow of a repeat of last year’s chaotic bailout negotiations.

The ministers from the 19 countries that use the euro — the Eurogroup — will also discuss debt relief for Greece, which the International Monetary Fund (IMF) has demanded as a condition for a new agreement.

The clock is ticking to complete the long-stalled first review of Greece’s 86-billion-euro ($95 billion) EU-IMF bailout so cash-strapped Athens can unlock billions of euros to pay the European Central Bank (ECB) in July.

Tensions are rising. Greece was paralysed at the weekend by a strike to protest government plans to overhaul pensions and increase taxes as demanded by its international creditors.

Greek Finance Minister Euclid Tsakalotos on Saturday urged eurozone countries to approve his economic programme — and warned darkly of the potential cost if the talks ran aground.

“Nobody should believe that another Greek crisis, leading perhaps to another failed state in the region, could be beneficial to anyone,” Tsakalotos said in a letter seen by AFP.

In its official agenda the Eurogroup said it would discuss the ‘progress achieved’ by Greek and creditor officials in recent days on the reforms, ‘with a view to conclude them as soon as possible’.

It added that it would ‘also discuss possible debt relief measures aiming at ensuring that Greece’s gross financing needs remain at a sustainable level, with a view to reach a political agreement’. “Both elements need to be in place in order to finalise the programme’s first review and unlock further financial assistance to Greece.”

European Commission Head Jean-Claude Juncker said in an interview to be published today in Germany, that Greece has ‘basically achieved’ the objectives of the reforms required by its creditors, adding that ‘discussions about how to make Greece’s debt sustainable in the long term’ would be on the agenda.

But the ongoing negotiations between Athens and its EU-IMF creditors are currently stuck on a demand that Greece commit to an extra set of reforms in case it misses its spending targets in 2018.

These so-called ‘contingency measures’ are a key demand of the IMF to complete the bailout’s first review, as the Fund is sceptical Athens will meet the targets.

IMF Chief Christine Lagarde warned there were ‘significant gaps’ in Greece’s reform offers, but she also pressed for debt relief in a letter to the finance ministers ahead of the meeting. “We believe that specific (economic reform) measures, debt restructuring, and financing must now be discussed contemporaneously,” according to the letter, a copy of which was obtained by AFP.

The extraordinary meeting was called after scheduled Eurogroup talks in Amsterdam on April 22 failed to produce a breakthrough in the review, which was originally meant to have been completed in December.

EU President Donald Tusk last week urged the ministers to close the Greek deal ‘very soon’, warning that ‘we need to make sure that Europe contributes to stability rather than global instability’.

The spectre of the Greek crisis has returned, adding to the EU’s headaches.

It comes in the runup to the British referendum on June 23 on whether to quit the 28-nation bloc — and the EU’s standing with many British voters is

already at a nadir.