International Money Fund (IMF) boss
Christine Lagarde has warned there is "no period of grace" for Greece
over a debt repayment deadline.
She said Greece would be in
default on its loans from the IMF if it failed to make a €1.6bn (£1.1bn;
$1.8bn) payment on 30 June.
Her comments came as European finance ministers were meeting in Luxembourg.
German Chancellor Angela Merkel said earlier she was "still convinced" that a Greek debt deal was possible.
Cash-strapped
Greece now has less than two weeks left to reach a debt deal, having
already rolled a €300m payment into those due on 30 June.
If it fails to make the payment, it risks having to leave the eurozone and possibly also the EU.
But
the European Commission, the IMF and the European Central Bank (ECB)
are unwilling to unlock bailout funds until Greece agrees to reforms.
They
want Greece to implement a series of economic changes in areas such as
pensions, VAT and on the budget surplus before releasing €7.2bn of
funds, which have been delayed since February.
On
his way into the Luxembourg meeting of Eurogroup finance ministers,
Greek finance minister Yanis Varoufakis said he would be presenting new
plans.
He said: "Some time ago, [ECB president] Mario Draghi said quite
correctly for the euro to succeed anywhere, it must succeed everywhere.
"Today
we are going to present the Greek government's ideas along those lines.
The purpose is to replace costly discord with effective consensus."
In
another development, Greek Prime Minister Alexis Tsipras denied
allegations that elderly Greeks were receiving lavish pensions.
Writing
in the German newspaper Der Tagesspiegel, he said: "The problem is not
one of supposed generous pensions. The most significant disruption to
the pension funds is due to dramatically lower revenues in recent years.
"These were caused by... the sharp drop in contributions that resulted from soaring unemployment and the reduction in wages."
'Commitments'
In
her statement to the German parliament, Mrs Merkel said Germany was
working hard to keep Greece in the euro, but said Athens had to follow
through on reform commitments.
"I'm still convinced - where there's a will, there's a way," she said.
"If those in charge in Greece can muster the will, an agreement with the three institutions is still possible."
Greece - deal or no deal?
Option 1: No deal: Greece defaults on
IMF and ECB repayments; ECB pulls plug on emergency bank assistance
leading to run on Greek banks, capital controls and potential Grexit
Option 2: Greece agrees reform deal with creditors at last minute and avoids default, staying in euro
Option 3: No deal reached but both sides paper over cracks and Greece stays in euro for now
Greece has less than two weeks remaining to strike a deal with
its creditors or face defaulting on an existing €1.6bn (£1.1bn) loan
repayment due to the IMF.
The country has already rolled a €300m payment into those due on 30 June. Peston: Will ECB keep Greece afloat? Walker: The options for Greece What impact would Grexit have on UK? Mrs
Merkel told the Bundestag that Greece had received "unprecedented help"
from its EU partners, but had failed to honour its commitments in
return.
She said: "In February there was an agreement - the Greek
government pledged to carry out structural reforms, and that must be
done."
Her statement suggested there was little room for manoeuvre over a
possible restructuring of Greece's existing debt mountain - and none
when it came to a Greek request for some, or for that matter any, of
that debt to be written off.
The
European Union's commissioner for economic affairs, Pierre Moscovici,
said the Eurogroup meeting would be "very difficult" but he hoped
everyone would turn up "with cool heads and the political will to
succeed".
Despite his optimism, the meeting was not expected to be long, nor was it expected that any substantive progress would be made.
But
talks are thought to have reached a stalemate, with Greece and its
creditors spending much of Wednesday blaming each other for the apparent
lack of progress. That
same day, Greece's central bank warned for the first time that the
country could be on a "painful course" to default and exit from both the
eurozone and the EU.
It said about €30bn had been withdrawn from
Greek bank deposits between October and April, although other analysts
suggest the amount of cash flooding out of the country's banks is far
greater.
"Failure to reach an agreement would... mark the
beginning of a painful course that would lead initially to a Greek
default and ultimately to the country's exit from the euro area and,
most likely, from the European Union," the Bank of Greece said in a
report.
'Compromising mood'
Greece's chief negotiator and junior foreign minister, Euclid
Tsakalotos, told the BBC Radio 4 Today programme that any deal had to be
one that was economically feasible.
"A couple of weeks ago, we
presented our ideas, which we thought was the common ground of the
negotiations of the last two or three months," he said.
"We think
that we have been in a compromising mood, we've been suggesting ideas,
whereas the institutions presented a paper that was very close to their
original bid. "So what we are saying is that further
compromises can be made, we can search for common ground, but the end
product of what we agree on reforms, on the financing for the future, on
the investment programme must be economically feasible."
He also said the country must be able to keep its fiscal promises.
Mr
Tsakalotos added: "So if we agree for a fiscal surplus of 1% this year
and 2% next year, then I have to be able to tell [the Greek prime
minister] that we can meet that, not that we're going to have more
recession that will make those targets unfeasible, and then the
Europeans will come back and say: 'You can't talk to the Greeks because
they never deliver their promises'."
Greek debt talks: main sticking points
Greece will not accept cuts to pension
payments or public sector wages, saying two-thirds of pensioners are
either below or near the poverty line
International creditors want pension
spending cut by 1% of GDP - it accounts for 16% of Greek GDP. They say
their target is early retirement not individual pensions
EU officials say Greece has agreed to
budget surplus targets of 1% of GDP this year, followed by 2% in 2016
and 3.5% by 2018. Greece says nothing is agreed until everything is
agreed
Creditors also want a wider VAT base; Greece says it will not allow extra VAT on medicines or electricity bills
Greece complains creditors focus on
increasing taxes instead of cracking down on tax evasion; IMF is
concerned Athens is not offering credible reforms
Is Greece close to Grexit? EU solidarity damaged by Greek splits Earlier,
Mr Tsakalotos told Reuters news agency that without help, Greece would
be unable to meet its obligations to the IMF on 30 June.
"At the moment, we haven't got the money," he said.
Greece's Mr Tsipras was due to attend the St Petersburg International
Economic Forum in Russia on Thursday and is scheduled to hold talks
with President Vladimir Putin on Friday.
BBC Europe correspondent
Chris Morris says that both Greece and its creditors appear to be
waiting for the other side to make the next move - and all the while the
risk of miscalculation, or of waiting too long, increases.
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