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Negotiations with the creditors in Athens will suffer further delays after the European Commission changed its mind and its representatives won't arrive in Athens today.

According to Commission sources interviewed by the online publication Capital.gr, the timing of the Commission representatives' visits to Greece has yet to be decided. And this seems to be the consequence of the Commission's need to harmonise its act with the IMF. The fund postponed its coming to Greece, and said it wouldn't materialise unless Athens made a formal request.

The meetings in Athens were due to start today, according to official statements of the ministry of finance and EU officials. Sources say a fix will have to be found as quickly as possible, since August 20 is the deadline for an agreement.

According to Capital.gr, bankers were told this morning that their meeting with the creditors in Athens was postponed until Monday.

Negotiations in Athens will cover the new credit agreement and the loan from the European Stabilization Mechanism.

The baseline scenario envisages a wrapup by August 12. Plan B involves a short extension with a new bridge loan from the European Financial Stabilisation Mechanism (EFSM) to cover the payments due meanwhile, with the first one worth €3.2 billion due to the IMF on August 20.

According to government sources, the creditors are pressing for a new package of measures before the 12 August agreement.

IMF's involvement

The official request, which the IMF expects before it comes to Athens, was mentioned for the first time yesterday by Fund representative Gerry Rice. It was sent late yesterday by Finance Minister Efklidis Tsakalotos. Today, the IMF confirmed its reception. "We will discuss with the authorities and with our European partners the time and conditions of the negotiations," said the Fund.

IMF's participation in the programme is necessary because otherwise footing the bill won't quite take place. According to government sources, the EFSM funding is short of the necessary €86 billion.

The IMF, however, has special requirements in terms of communication methods, access to government services, as well as the package of measures. And this is so because the IMF needs to work out whether it will continue the memorandum now being cobbled together by the EU or replace it with a Memorandum of Economic and Financial Policies of its own, which will be more demanding than the EU's one.

The consultations

The second question concerns the place and manner of consultations in Athens. Had the EU institutions (the European Commission, the ECB and the EFSM) come, the issue would have been resolved. It is currently in limbo.

According to government sources, the negotiations on the Greek side will be headed by the president of the council of the financial experts, George Chouliarakis, who led the negotiations at the Brussels Group level as well.

The fronts

The first days are believed to be the most critical ones because the instructions the participants have received will pan out: whether the softer perspective – coming through in Moscovici's pronouncements – will prevail or those who demand more stringent measures.

The widest gaps will open on these two subjects:

-        How are the measures to be eked out in time, how many of them should enter into force immediately and how many can be pushed back to other quarters in the three-year memorandum.

-        The size and structure of financial deficit, i.e. the austerity measures, which Greece will have to swallow in the coming years, and the ways to sanction failure.