Greece Bailout Talks Stall Over 'Security' Issues, Amid Mistrust On Both Sides

2015-07-24T122331Z_417857639_GF10000168842_RTRMADP_3_EUROZONE-GREECE — Greek Prime Minister Alexis Tsipras leaves his office at the Maximos Mansion to attend a meal of the Greek political party leaders at the Presidential Palace, hosted by President Prokopis Pavlopoulos (not pictured) to commemorate the 41st anniversary of the Restoration of Democracy after the fall of the military junta in 1974 in Athens, Greece July 24, 2015. No date has been set for the beginning of formal talks on a new rescue program for Greece because international creditors are still looking for a secure place to hold negotiations in Athens, a European Commission official said on Friday. Reuters/Alkis Konstantinidis

Talks between Greece and its European creditors failed to start as expected in Athens on Friday, ostensibly over logistical and security issues, but brinkmanship and a lack of trust between the parties were also factors, according to officials from both sides who briefed media outlets.

Greek Prime Minister Alexis Tsipras agreed to “fully normalize” talks with creditors in Athens, as a condition for negotiations on a third bailout. Representatives of the “troika” have not set foot in Athens since Tsipras' Syriza-led government was elected in January, with talks on Greece's debt being held in Brussels.

But senior officials from Greece’s bailout monitors told the Financial Times that Athens had subsequently demanded restrictions on negotiators, including on whom creditors could meet with and what topics were to be discussed in the talks.

“It is fundamentally more of the same,” a senior official told the paper. “They don’t want to engage with the troika.”

The Syriza government, which had previously vowed to never let the auditors set foot in Greece again, is understood to be irritated by demands that the creditor team is given free access to ministries and files, the Guardian reported.

“A lot of trust has been lost and the big issue is who they are going to see, what ministries they are going to be let into, what files are going to be made available,” said Anna Asimakopoulou, a shadow finance minister with the main opposition New Democracy party.

The creditors' presence in Athens also raises the issue of wounded Greek pride. Former finance minister Yanis Varoufakis said in May that "motorcades" of the creditors' representatives moving around the Greek capital were humiliating, Reuters reported.

Sensitivities are high in Greece over the presence of foreign officials associated with the much-hated austerity policies that deepened the country's long economic depression, and the security of officials from the creditor bodies is a concern.

"There are some logistical issues to solve, notably security-wise," a European Commission official told Reuters. "Several options are on the table," the official said, without giving more details.

Separately, Greece formally submitted a request for a new loan from the International Monetary Fund (IMF). In a letter to IMF head Christine Lagarde dated July 23 but released to the public on Friday, Greek Finance Minister Euclid Tsakalotos wrote that Athens was "seeking a new loan."

The IMF confirmed receipt of Greece's request, and said that it will discuss with Greek and EU authorities “the timing and the modalities” of talks on a possible third bailout.

Talks between Greece and its creditors are now expected to commence over the weekend or on Monday.