Energy sector reforms demanded by the country’s lenders are developing into one of the biggest obstacles preventing the conclusion of the bailout’s second review. Rather than bring the negotiating sides closer together, a teleconference held two days ago between energy minister Giorgos Stathakis and creditor representatives has widened the gap.

The lenders are not making any concessions and, on the contrary, proving relentless in their demand for the launch of a sale process offering 40 percent of main power utility PPC’s lignite-fired and hydropower stations.

This demand is being linked to a recent European Court decision supporting the access of third parties to the country’s coal deposits.

At the same time, the lenders do not appear willing to include into any agreement a proposal made by PPC to sell off new subsidiary retail units with existing clients on board as a means towards satisfying the market share contraction targets imposed on the utility through the bailout.

Instead, the lenders are insisting on their proposal for a drastic increase of electricity amounts offered to independent traders through the recently introduced NOME auctions. Lower-cost electricity produced at the utility’s lignite-fired and hydropower stations is made available to independent traders at these auctions.

Energy ministry officials are unquestionably troubled by the adamant stance of the lenders. Until recently, Stathakis, the energy minister, insisted energy-sector issues would not hold back the second review’s conclusion. However, the sector’s issues have now been become a crucial aspect for any agreement between the government and the lenders.

Prime Minister Alexis Tsipras has been informed of the impasse and is expected to intervene at a political level, especially on the demand for the sale of PPC units.

Such a development could prove devastating for the coalition’s hold on power. A considerable number of MPs supporting the coalition’s slender majority in parliament, especially ones representing seats in northern Greece’s western Macedonian region, have made clear they will not endorse any plan that would include the sale of PPC production units.