Alexis Tsipras Faces Race Against Time To Secure Greece Bailout Deal

        ATHENS—Talks to complete a new bailout program between Greece and its creditors will start on Tuesday, almost a week later than planned, raising pressure on Greek Prime Minister Alexis Tsipras, who needs financing to repay bonds falling due on Aug. 20, but is also struggling to prevent his party from falling apart.
        A delegation from the institutions policing eurozone bailouts—the so-called troika of the European Commission, the European Central Bank, the eurozone's bailout fund, and the International Monetary Fund—was initially supposed to arrive in Athens last week. But its arrival was delayed by differences between Greece and its creditors on logistics and procedural issues, costing several days.
        The two sides are racing against time, as a new bailout program for Greece worth up to ˆ86 billion ($95 billion) would have to be completed and approved by the Greek parliament, as well as lawmakers in Germany and elsewhere, by mid-August if Athens is to secure billions of euros to repay the ECB-held bonds that mature on Aug. 20.
        The biggest sticking point is whether Greece will have to pass another round of painful and politically divisive austerity measures, including tax increased and pension cuts, before negotiations conclude.
        Greece argues it has already taken the short-term measures it promised under the political deal on a new bailout reached with European leaders on July 12. Officials from the creditors' side say other European governments want Athens to go further, to prove it is serious about reforming its economy.
        Enacting economic overhauls in August would be "politically wise" for facilitating an agreement, one European official said Monday.
        If a bailout program can't be completed in time, Greece would need interim financing from a European Union emergency fund or another source to repay the ECB-held bonds. Such financing would also be conditional on Greece's parliament passing another set of tough economic overhauls, at a time when the Greek premier is trying to stop his leftist Syriza party from falling apart.
        Since acceding to Europe's demands to secure a tentative bailout deal on July 12, a quarter of Syriza's lawmakers have already voted against Mr. Tsipras's austerity measures, which passed only thanks to opposition parties' support.
        The Greek premier must this month strike a balance between appeasing creditors and preventing further defections from his ruling coalition.
        Mr. Tsipras is aiming to strike a deal as quickly as possible, before dealing with Syriza's internal rebels at a party congress in the fall, which could well lead to the party splitting, government officials say. New parliamentary elections are widely expected shortly afterward.
        Meanwhile the 40-year-old prime minister is facing another headache in the form of his former finance minister Yanis Varoufakis, after details of a call the latter held with international investors became public at the weekend.
        During the call, the flamboyant Mr. Varoufakis claimed he hired a friend and IT specialist months ago to hack into the Greek tax commissioner's data to get information needed to set up a parallel payment system based on government-issued IOUs in case Greece could no longer stay afloat using euros.
        Deputy Finance Minister Dimitris Mardas said Monday that the government never planned such a step. Opposition figures are asking for judicial authorities to look into Mr. Varoufakis's claims.
        Mr. Varoufakis was ousted as finance chief by Mr. Tsipras in early June to help smooth the way for a deal with Europe.
        Before talks on substantive policy issues have even begun, Greece and its creditors have squabbled in recent days over where the delegation of international negotiators should be based. Greek authorities want the negotiators to stay in hotels by the sea, while the bailout institutions want city-center accommodation close to ministerial buildings.
        Another point of contention has been whether the foreign technocrats will be able to enter Greek ministries and negotiate directly with ministers, a procedure that Greece's government, led by Syriza, has rejected since winning power as a threat to Greece's sovereignty.
        Inspectors from the European Commission, IMF and ECB visited Athens regularly from 2010 to 2014 to assess Greece's progress in implementing its bailout program, including sweeping austerity measures.
        Mr. Tsipras's government, after fighting to keep the unpopular troika out of Greece and shift negotiations to Brussels instead, had to accept the inspectors' return to Athens as part of the July 12 deal. Germany and other eurozone governments view the inspectors' freedom to work in Athens, including to gather data and sign off on Greek legislation, as a prerequisite for a new bailout program.
        While the two sides have agreed to let inspectors enter ministry buildings and institutions such as the Bank of Greece and the General Accounting Office, it remains unclear how much access they will have to several key ministers, Greek and European officials said.
        Write to Nektaria Stamouli at nektaria.stamouli@wsj.com and Viktoria Dendrinou at viktoria.dendrinou@wsj.com
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        (END) Dow Jones Newswires

        July 27, 2015 13:00 ET (17:00 GMT)

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