EU creditors have not ruled out concluding a deal to unlock Greece’s latest batch of rescue cash this month, according to the continent’s bailout chief.

Klaus Regling, head of the European Stability Mechanism which is Greece’s single largest creditor, said the chances of eurozone finance ministers and the IMF signing off on Athens’ second bailout review at a Eurogroup meeting on March 20 were “not excluded” but warned there was “still a lot of work to do”.

“We need to see how much progress will be made in the next two weeks. We always find a solution in the end”, said Mr Regling.

Progress on the country’s €86bn rescue deal has stuttered this year following a standoff between the EU and IMF over the level of austerity, reforms and debt relief baked into Greece’s three-year programme.

Bailout monitors however returned to Athens last week to ensure the left-wing Greek government was making steps towards legislating for around €2bn in tax and pension measures that will help the country meet a surplus target of 3.5 per cent of GDP from 2018. Approval of the second review would unlock around €6bn in rescue cash for the economy.

In an interview with Nikkei, Mr Regling said the Syriza government’s work meant there were only “very small” steps to be taken on the fiscal measures. They include raising the country’s income tax base and further cuts to pensions spending.

March’s Eurogroup meeting will fall after a general election is held in the Netherlands next weekend, with fears that a host of European elections could put off a Greek agreement until later in the summer. Athens faces a €7bn repayment to its creditors in July.

Uncertainty and delay over Greece’s bailout seems to be hitting the economy, which contracted by 0.4 per cent at the end of last year, while the country’s manufacturing sector has shrunk for six straight months.

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