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Germany wants strict conditions attached to new Greek bailout

German government spokesman Steffen Seibert listens during a news conference of Chancellor Angela Merkel in Berlin, July 18, 2014. REUTERS/Thomas Peter

By Paul Carrel BERLIN (Reuters) - Germany pressed on Monday for strict conditions to be attached to a new bailout accord for Greece, arguing for aid payments to be tied to Athens' reform progress and holding out the possibility of a delayed final deal. The hard line from Berlin reflected popular misgivings in Germany about funnelling yet more aid to Athens and policymakers' loss of trust in the Greek government of left-wing Prime Minister Alexis Tsipras. An accord for up to 86 billion euros ($94 billion) in fresh loans to the debt-stricken nation must be in place by Aug. 20, when a debt repayment to the European Central Bank is due. But Germany stressed its wish for "quality before speed" in the negotiations and held out - as it has before - the possibility of a temporary bridge financing arrangement if a sufficiently thorough bailout agreement is not reached in time. "It is sensible - that is our belief - to fix the size of the first payment tranche to the extent of the reforms implemented," Finance Ministry spokesman Juerg Weissgerber told a regular government news conference. "That means strict conditionality for financial help," he said, adding that Germany wants a deal that includes an ambitious budget plan, a credible privatisation strategy, and sustainable pension reform. The call from Berlin for a measured, strict approach came as Greece and international creditors sought to put final touches on a multi-billion bailout accord to keep the country financially afloat. Greek ministers and representatives of European institutions and the International Monetary Fund resumed talks earlier on Monday after a marathon session that ended in the pre-dawn hours. Stressing that Germany is not involved in the negotiations, Weissgerber said Berlin would need time after any accord to review the results of the talks, which would subsequently be put to a parliamentary vote. "We are ready to do this examination quickly this week if necessary, but quality comes before speed," he said. BRIDGE FINANCING? Greek officials have previously said they expect the bailout to be agreed in time to allow a first disbursement of aid from the European Stability Mechanism (ESM) in time to allow Athens to make its debt payment to the ECB. But Weissgerber held out the possibility of missing the Aug. 20 deadline: "Should a first ESM tranche not be possible in August, then we would have to discuss renewed bridge financing," he said. Last month, German lawmakers gave their go ahead for the euro zone to negotiate a third bailout for Greece, but almost a fifth of Angela Merkel's conservatives voted 'no' in a blow to the chancellor. Germany is the euro zone country that has already contributed most to Greece's two bailouts since 2010. Ralph Brinkhaus, deputy parliamentary floor leader for Merkel's conservatives, said earlier on Monday that Germany had lost a lot of trust in Greece. "The more money is handed out in one stroke, the less leverage one has to stop payments if the reform process in Greece does not pan out as planned and as promised," Brinkhaus told Deutschlandfunk radio. (Writing by Paul Carrel; editing by Jeremy Gaunt)