The International Monetary Fund (IMF) announced on Thursday that the talks on a possible new Greek bailout have not progressed much as differences remained.

The statement came hours after Greek Prime Minister Alexis Tsipras held talks with German Chancellor Angela Merkel and French President Francois Hollande.

IMF spokesman Gerry Rice said that major differences remained between Greece and its international creditors in most key areas, daily Kathimerini reports.

Rice added that the sides were not close to an agreement as there has been no recent progress in narrowing the differences between them.

Greece is expecting to be granted a new EUR 7.2 B bailout, which would allow the country to continue paying its debts and domestic government obligations.

In exchange the country has to fulfil certain reforms and austerity measures, which has become the bone of contention between the government in Athens and its creditors.

According to Rice, the discussions were focused on pensions, taxation and financing, with the country’s generous pensions posing a key challenge.

In his words, since wages and pensions represented 80 % of Greek total primary spending, it would not be possible for the country to achieve its medium-term fiscal targets without reforms, especially of pensions.

Although the Greek pension system has been identified as unsustainable by all sides, the IMF did not want to deprive the most vulnerable Greeks of income.

Rice assured that the basic pensions targeting the most vulnerable groups were protected and protection was sought for the lowest income pensioners.

The IMF spokesman also highlighted the need for improvements in the tax system, especially in collecting revenues from Value Added Tax (VAT).

According to him, the problems were due to the VAT structure being highly complex and allowing for significant leakage in the system.

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