Eurozone hopes for Greece debt deal in late May

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Greek parliament approves controversial pension, tax reforms: AFP

Brussels (AFP) - Eurozone finance ministers on Monday gave themselves until May 24 to reach a deal on debt relief and unlocking bailout cash for Greece as they lauded Athens for passing tough reforms.

The 19 ministers meeting in Brussels failed to sign off on the long-delayed first review of last July's 86-billion-euro ($95 billion) EU-IMF bailout -- but said this could be done in the "coming days".

Eurogroup chief Jeroen Dijsselbloem said that the Greek parliament's approval of fresh reforms in a tense vote late Sunday "paves the way for successful completion of the first review" of last July's bailout.

Greece hailed the meeting in Brussels as clear victory for Athens even though it ended without any official decision to grant bailout cash or decide debt relief.

"Greece is turning the page ... the vicious circle is over," said Greek Finance Minister Euclid Tsakalotos after the talks.

"Greece has been given the green light that the programme is on track," he added.

The government of Prime Minister Alexis Tsipras is eager to win the green light from its creditors to unlock much needed cash from the bailout, to avoid defaulting on huge debt payments this July.

Also left unresolved on Monday were the deep divisions between the eurozone and the International Monetary Fund, which has threatened to pull out of the bailout if Greece does not get relief for its huge mountain of debt.

- 'Cherish IMF' -

Several powerful eurozone members, led by Germany, insist the IMF remains part of the bailout as they do not trust EU officials to maintain a tough line on Athens.

"There's a number of member states, actually quite broad, that cherish IMF participation," Dijsselbloem said when asked if the fund could leave the bailout.

But it is acknowledged that debt relief is key to the IMF's continued role and Dijsselbloem said European and IMF officials would work on the issue ahead of the next meeting of finance ministers on May 24.

German Finance Minister Wolfgang Schaeuble, the Eurogroup's most influential member, was optimistic of a deal in time for the next meeting, despite his own strong opposition to debt relief.

"I am still confident of finding a solution in May," he said.

Also on the table is a demand to Athens for extra reforms in case it misses its spending targets in 2018.

These so-called "contingency measures" are another key requirement of the IMF, as the Fund is doubtful that Athens will meet the targets.

But Greece has said legislating reforms intended for 2018 is impossible, and Prime Minister Alexis Tsipras said the Eurogroup had accepted the Greek position.

"There is no demand that Greece legislate on contingency measures," Tsipras said in a statement after the talks in Brussels.

Instead, the measures would only be decided if necessary and included "as part of (Greece's) regular budgetary process," the Eurogroup said in a statement.

Greece is due to repay big loans to the European Central Bank (ECB) and IMF in July, and has already fallen behind in paying for everyday government duties and public sector wages.

The finance ministers' meeting followed days of protests in Greece, where tens of thousands took to the streets again to slam the unpopular reforms adopted late Sunday which reduce the country's highest pensions and raise taxes.

The measures were passed thanks to the government's slim majority in the 300-seat parliament, with the coalition's far-left Syriza party voting in favour of the measures despite fears of dissensions.

In the run-up to the vote, angry unions staged a general strike that paralysed public transport, while some 26,000 people took to the streets of Athens and Greece's second city Thessaloniki.