Greek leader meets Hollande, Merkel amid stalemate
ATHENS, Greece - Greek Prime Minister Alexis Tsipras told the leaders of France and Germany Friday that his government does not understand the insistence of the country's creditors on harsh austerity measures, a Greek official said.
Tsipras met with German Chancellor Angela Merkel and French President Francois Hollande on the sidelines of a European summit in Brussels, amid deadlocked talks on his country's bailout and with potential default looming.
Negotiations have stumbled on what economic reforms Greece must make in return for the remaining 7.2 billion euros in its international bailout program.
Without the loans, the country faces bankruptcy and potentially having to leave Europe's joint currency, the euro. That would likely plunge the country back into a deep and long recession and shake European and global markets.
European leaders have demanded finance ministers from eurozone countries reach an agreement Saturday on the reforms Greece must make to unfreeze its bailout loans.
In his meeting with the French and German leaders, Tsipras "stressed that the Greek side doesn't understand the insistence of the institutions on such harsh measures," a Greek government official said.
The official, who spoke on condition of anonymity in line with government rules, said negotiations would continue in Brussels after the summit's end.
Although both sides have given way on some issues, according to leaked documents of proposed deals on either side, differences remain between Athens and its creditor negotiators -- the IMF, European Central Bank and European Commission.
The IMF in particular has considered Greece's proposed reforms as being too tax-heavy and not containing enough spending cuts. For its part, Athens says it will not accept further cuts to pensions and salaries.
Tsipras, elected in January on promises to repeal the deep austerity measures imposed on the country in return for two bailouts totaling 240 billion euros, has been adamant he will not agree to more recessionary measures.
With the European part of Greece's bailout expiring on Tuesday, and with it the country's potential access to the remaining funds, time is running out.
"It really has to happen tomorrow," said Jeroen Dijsselbloem, who heads the 19 eurozone finance ministers' meetings known as the eurogroup, said of a potential deal. Any agreement, he noted, would have to go through the parliaments of Greece and several other eurozone countries, meaning the weekend is the latest possible time for a deal to be reached before June 30.
Greek officials have said all possibilities remain open, including that of not reaching an agreement.
In the current climate, with creditors insisting on draconian budget savings, "the chances are very small" for an agreement, Labor Minister Panos Skourletis said on private Mega television.
Business leaders in Greece have been alarmed by the proposed measures, which include increases in company and consumer taxes.
The creditors' proposed measures are "exceptionally punishing for the Greek society and economy," said Vasilis Korkidis, head of the Hellenic Confederation of Commerce and Entrepreneurship, saying they would affect profitable parts of the Greek economy.
However, he warned, an alternative of no solution and a break in ties with Greece's European partners would be far worse.
"If you ask me ... what I prefer between a bitter and painful deal and a catastrophic rupture, I clearly chose a deal for Greece to remain in the euro with a vision of growth," Korkidis said in a statement.
Dijsselbloem said a package was needed "that gets Greece back on its feet." He noted investors had left the country and said many no longer had faith in the government.
"The trust has to return and that requires a deal, it requires a number of reforms and they will have to accept that," Dijsselbloem said.
"It is not a question of having it imposed from outside, but if you don't realize that yourself, if they don't feel that there are a number of necessary measures, then we will never agree."
But Finance Minister Yanis Varoufakis, speaking to Irish radio RTE, said Greece had "bent over backwards to accommodate some rather strange demands by the institutions. It is now up to them to come to the party."
He said there was a "moral duty" to reach an agreement.
"Our commitment to remain in the eurozone is absolute," Varoufakis said. However, he added, as a debtor nation "I think I have a duty not to take on more loan tranches unless there is some prospect that these debts will be repaid."
Separately, a banking official said the European Central Bank had agreed Friday to a request for support to Greek banks. The official declined to specify whether the request was for an increase in the emergency credit Greek banks have been receiving.
Worried depositors have been pulling their money out of Greek banks, fearing a failure in the negotiations could lead to financial turmoil and a restriction on banking transactions. An estimated 4 billion euros left Greek banks last week.