Trust gap overhangs Eurogroup meeting on Greek debt deal

After months tough negotiations, eurozone finance ministers gathered in Brussels on Saturday afternoon with expectations to seal a deal on Greece's bailout program, but doubts on Greece's implementation of the reform measures hiked.

The crucial meeting was widely seen as a "decisive moment" for Greece's fate: either a bailout deal or Greece's exit from the European common currency zone.

Greece submitted its formal request to the European Stability Mechanism (ESM) on Wednesday, asking for a three-year loan from the bailout fund.

The financially-troubled country then submitted a detailed package of reform proposals to the Eurogroup on Thursday night, pledging to carry out a new package of comprehensive reform measures promptly.

The creditors had given a positive assessment which makes it possible that an agreement to aid Greece will be reached on Saturday's meeting of the Eurogroup.

"We are clearly making progress. Greek proposals are pretty much along the lines of the proposals of the institutions," Valdis Dombrovskis, vice-president of the European Commission in charge of the Euro and Social Dialogue, said before the meeting.

"The institutions believe new Greek proposals can be basis for negotiations," said Pierre Moscovici, European commissioner in charge of Economic and Financial Affairs, Taxation and Customs, adding that the Greek government had made a significant gesture in the new proposals.

International Monetary Fund (IMF) chief Christine Lagarde also hoped for "a lot of progress" when she was walking into the Eurogroup meeting.

But Eurogroup President Jeroen Dijsselbloem expressed cautious reservation about a deal, warning that "We're not there yet. It will be a difficult meeting."

According to Dijsselbloem, there were still lots of criticism on the content of the Greek proposals.

"The Greek government needs to listen to ministers and institutions to see what improvements are needed," he said.

Dijsselbloem told reporters that lack of trust was a major issue to clinch a Greek bailout deal.

In exchange for a 53.2-billion-euro (about 59 billion U.S. dollars) third bailout program through the ESM, Athens have made significant concessions in the proposals, including a new set of tax hikes, pension cuts and economic reforms which were rejected by last Sunday's Greek referendum.

"How can we expect this Greece government to implement what it is now promising?" he said, adding that Greece has to show strong commitment to rebuild trust.

As a wide trust gap has developed over the past few months, finance ministers stepped into the meeting with divided opinions.

Some countries doubted whether Greece would ever implement these reforms even if they promised to.

"We need guarantees for the implementation of the Greek reforms," Hans Jorg Schelling, Austria's Finance Minister, said before stepping into the meeting.

German Finance Minister Wolfgang Schauble also warned of "extremely difficult" negotiations, saying a solution could not come easily.

Meanwhile, French Finance Minister Michel Sapin was trying to push the talks forward, saying "I hope we go as far as possible to find the elements of a deal."

Sapin said the Greek government had shown political determination and called on the creditors to accept the proposals.

Greece's parliament backed the government early Saturday to carry out a new package of reform measures with 251 votes in favor versus 32 against.

"The Greek government has shown courage by getting a mandate from parliament," Sapin said.

"The Eurogroup needs to show that, if trust is there, we're capable of offering support," the French finance minister added.

If the Eurogroup agrees to open negotiations, Sunday's planned emergency summit of 28 European Union leaders may be cancelled.

Otherwise, if the finance ministers couldn't reach an agreement on renegotiation, Athens has a last chance trying to persuade leaders on Sunday to open negotiations.

Without a debt deal in the coming hours, Greece faces a financial collapse and a Grexit. Greek banks have been closed for the past two weeks and are running out of cash while the country's economy is suffering from capital controls.

Besides, Greece has been in arrears to the IMF since July 1 and faces a 3.5-billion-euro debt repayment to the ECB on July 20. (1 euro = 1.11 U.S. dollars)