Brussels, November 9

Eurozone finance ministers were set to withhold two billion euros from Greece’s huge bailout at a meeting today, European sources said, as tensions resurfaced just months after Athens narrowly avoided a euro exit.

Athens has failed to meet strict reform commitments, with differences over foreclosure rules as the leftist government of Prime Minister Alexis Tsipras insists on protections for low-income homeowners, officials said.

Creditors European Union, European Central Bank (ECB) and International Monetary Fund (IMF) agreed an 86-billion-euro ($96 billion) debt rescue on July 13 but set tough conditions requiring Athens to cut spending, raise taxes and modernise the economy.

“There will be no deal today on the two billion payment,” a senior European source told AFP, hours after senior eurozone officials failed to forge a compromise in preparation for the meeting of 19 eurozone finance ministers.

Two European sources added that a decision was likely later this week when senior eurozone officials hold a teleconference.

However France, which has backed Greece throughout the torrid bailout process, said earlier that, despite the disagreements, a deal to unlock the payment was still within reach today.

“Greece has made considerable efforts (that are) all within the bailout agreement of July 13,” French Finance Minister Michel Sapin told reporters in Paris as he headed for the talks.

“I understand the worries of the Greek government,” Sapin said, adding that France and Germany also had laws to limit bank seizures. “It’s a bit strange that we’re always asking more of Greece than what exists in creditor countries.”

The renewed tensions hit the financial markets today with Paris and Frankfurt stocks both down 0.20 per cent amid worries about Greece’s banks.

Greece’s two earlier bailouts, in 2010 and 2012, totalled 240 billion euros and more than 100 billion more in a private sector debt write-off, but Athens struggled to meet the stringent austerity and reform conditions.

The Tsipras government was expected to have finalised a series of so-called reform ‘milestones’ by mid-October but has been stuck on the details.