Greek Prime Minister Alexis Tsipras accused international creditors of "blackmail" on Friday after euro zone partners warned Athens it had 48 hours to accept a cash-for-reform deal or plunge toward default next week.
But despite angry rhetoric on both sides, negotiations were continuing in Brussels to find a last-ditch compromise to keep Greece in the euro zone to avoid a political train-wreck, economic chaos and financial market disruption.
In a carrot-and-stick approach, the euro zone offered to release billions in frozen aid if Greece accepted and implemented pension and tax reforms that are anathema to its leftist government, elected in January on a promise to end austerity.
They also made a gesture toward Tsipras' demands for debt relief by offering to reaffirm a 2012 pledge to consider stretching out loan maturities, lowering interest rates and extending an interest payment moratorium on euro zone loans to Greece, a senior EU official said.
However, a Greek government official rejected as "totally inadequate" the creditors' offer to extend its existing bailout program by five months, as the leftist premier flew home to Athens.
German Chancellor Angela Merkel and French President Francois Hollande met Tsipras on the sidelines of an EU summit to coax him to accept an offer to fill Athens' empty coffers until November in return for painful reforms.
If Greece does not clinch an agreement at the weekend to unlock funds, it is set to default on an International Monetary Fund loan on Tuesday, possibly sparking a bank run, capital controls and raising doubts about its future in the euro zone.
Tsipras sounded defiant on leaving the summit, telling reporters Greece would fight for the European principles of democracy, solidarity, equality and mutual respect. "These principles were not based on blackmail and ultimatums," he said in English.
However, he did not rule out accepting a deal. European Council President Donald Tusk retorted: "It is not political blackmail when we repeat day after day that we are very close to this day (June 30) when the game is over." Merkel said she and Hollande had urged him in a 45-minute private meeting to accept the creditors' "generous" offer.
"We have taken a step towards Greece," she said. "Now it is up to the Greek side to take a similar step." Both she and Hollande said Saturday's meeting of euro zone finance ministers would be the decisive moment for a deal since time was running out to secure German parliamentary approval in time to release funds needed to avert a Greek default.
reuters.com
But despite angry rhetoric on both sides, negotiations were continuing in Brussels to find a last-ditch compromise to keep Greece in the euro zone to avoid a political train-wreck, economic chaos and financial market disruption.
In a carrot-and-stick approach, the euro zone offered to release billions in frozen aid if Greece accepted and implemented pension and tax reforms that are anathema to its leftist government, elected in January on a promise to end austerity.
They also made a gesture toward Tsipras' demands for debt relief by offering to reaffirm a 2012 pledge to consider stretching out loan maturities, lowering interest rates and extending an interest payment moratorium on euro zone loans to Greece, a senior EU official said.
However, a Greek government official rejected as "totally inadequate" the creditors' offer to extend its existing bailout program by five months, as the leftist premier flew home to Athens.
German Chancellor Angela Merkel and French President Francois Hollande met Tsipras on the sidelines of an EU summit to coax him to accept an offer to fill Athens' empty coffers until November in return for painful reforms.
If Greece does not clinch an agreement at the weekend to unlock funds, it is set to default on an International Monetary Fund loan on Tuesday, possibly sparking a bank run, capital controls and raising doubts about its future in the euro zone.
Tsipras sounded defiant on leaving the summit, telling reporters Greece would fight for the European principles of democracy, solidarity, equality and mutual respect. "These principles were not based on blackmail and ultimatums," he said in English.
However, he did not rule out accepting a deal. European Council President Donald Tusk retorted: "It is not political blackmail when we repeat day after day that we are very close to this day (June 30) when the game is over." Merkel said she and Hollande had urged him in a 45-minute private meeting to accept the creditors' "generous" offer.
"We have taken a step towards Greece," she said. "Now it is up to the Greek side to take a similar step." Both she and Hollande said Saturday's meeting of euro zone finance ministers would be the decisive moment for a deal since time was running out to secure German parliamentary approval in time to release funds needed to avert a Greek default.
reuters.com
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