Greece has told its European and International Monetary Fund creditors it cannot implement some of the extra changes sought in exchange for fresh bailout loans, three sources close to the talks said on Monday.
The disagreement could further delay the disbursement of the bailout funds which Athens badly needs to pay off IMF loans in June, bonds of the European Central Bank maturing in July and increasing state arrears.
Last week, after months of negotiations, Greece and its lenders concluded a key bailout review, opening the way for debt relief that Greece has long desired.
The lenders also gave the green light for the disbursement of €10.3bn in tranches, on condition that Athens amends some recent laws concerning pensions, privatisations and freeing up the sale of bad loans.
But in a letter sent to the lenders last week, Finance Minister Euclid Tsakalotos said some of the additional demands could not be fulfilled, the sources said.
The finance ministry had no immediate comment and it was not immediately clear whether the release of the funds was at risk.
According to one of the sources, some of them were related to bad loans and to pension reforms.
“We cannot make any substantial changes. But we will proceed with the technical amendments discussed. Some of them are in the right direction,” a government official told Reuters.
Greek newspaper Ta Nea said the letter had been sent to EU Commissioner Pierre Moscovici, the ECB’s Benoit Coeure and the IMF’s Poul Thomsen.
In Brussels, an EU official confirmed that the two sides were still “working to finalise the measures” required after Athens raised its latest concerns.
The Ta Nea newspaper said specific areas of disagreement also included the privatisation of the country’s grid operator ADMIE and freezing the wages of essential services such as the coastguard and police.
During a parliamentary debate last week, the government replaced the relevant reference on the essential services with a sentence saying it had until the end of year to find alternatives measures.
Prime Minister Alexis Tsipras said a wage freeze “would have been a great injustice for men and women in the army, police and coastguard who work 24/7 helping a country that is struggling with an unprecedented refugee crisis to stand on its feet”.
To qualify for the rescue funds, Greece has so far approved pension reforms, tax hikes, the establishment of a privatisation fund and a contingency mechanism for spending cuts to be activated if it seems set to miss fiscal targets.
The measures have tested the left-led coalition government, which has a narrow parliamentary majority with 153 of the 300 lawmakers. One lawmaker has resigned from Tsipras’ Syriza party in protest over the measures.