Eurozone, IMF far from Greek deal: source
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PARIS, Nov 21 AFP
November 22 2012, 00:24AM
Eurozone finance ministers and the IMF are still far from a deal on releasing rescue funds to Greece because of disagreement over Greece's debt pile, a source close to failed overnight talks has told AFP, contradicting France.
"We are really not close to an agreement," the source who declined to be named said after eurozone ministers and the IMF failed in talks in Brussels which went into the early hours of Wednesday morning.
The talks, lasting 11 hours, were unable to agree on releasing the latest instalment of rescue funding needed to save Greece from bankruptcy and which are tied to approved new austerity measures, because of the related issue of managing the huge Greek debt mountain.
The source told AFP that the talks, attended by the director general of the International Monetary Fund (IMF), Christine Lagarde, and the president of the European Central Bank, Mario Draghi, were stuck on the issue of how to ensure that Greek debt is sustainable in the medium term.
But French Finance Minister Pierre Moscovici said that the meeting had ended just a "whisker" away from a deal.
German Chancellor Angela Merkel said in Berlin on Wednesday that she saw "a chance" that agreement could be reached at a follow-up meeting of eurozone finance ministers on Monday.
The IMF was insisting that measures be agreed to ensure that the ratio of Greek debt to output be reduced to 120 per cent by 2020 from an expected figure of 190 per cent, the source said.
Currently, the IMF "is refusing to sign an agreement which it considers to be unrealistic," the source said.
The eurozone finance ministers, meeting as the Eurogroup, are to meet meet again with the IMF and the ECB on Monday.
The IMF is constrained by its statutes from lending to a country which cannot reasonably be expected to repay its debt in the medium-term.
The ratio used as a benchmark of sustainability is 1.2 per cent of annual output, or a debt of 120 per cent of gross domestic product.