Last-ditch talks between Greece and its EU-IMF creditors ended with no deal on Sunday, setting the countdown towards a disastrous default by Athens with the threat of a Greek exit from the euro closer than ever. The crunch negotiations failed in their second day, heaping worry that the cash-starved Greek government was heading irreversibly into a financial abyss.
"While some progress was made the talks did not succeed as there remains a significant gap between the plans of the Greek authorities and the joint requirements of the (European) Commission, ECB and IMF," a EU spokesperson said.
"They came with their hands in their pockets," another furious source close to the negotiations told AFP. All sides had agreed that the talks were the last chance for Athens to unlock vital bailout cash in return for tough reforms that Greece's 40-year-old, tie-eschewing premier Alexis Tsipras still doggedly refuses.
Greek officials said the failure to strike a deal was the fault of the International Monetary Fund, the country's most hard-line creditor.
Irrational demands
"The demands of the creditors are irrational, the discussions lasted 45 minutes," a Greek government source said.
The IMF's position was "intransigent and tough" because it was insisting on further cuts for pensions and a rise in value-added tax on basic goods, like electricity, the source added.
According to an EU source, savings from the reform measures put on the table by Greece fell short by two billion euros.
The Greek proposal "remains incomplete", the EU source said, and was not enough to unlock the 7.2 billion euros ($8.1 billion) still remaining in Greece's international bailout, which expires on June 30.
"On this basis further discussions will now take place in the Eurogroup," the EU spokesperson said, referring to a meeting of eurozone finance ministers set for Thursday in Luxembourg.
European Commission chief Jean-Claude Juncker "remains convinced that with stronger reform efforts on the Greek side and political will on all sides, a solution can still be found before the end of the month," the spokesperson said.
Things turned sour at the latest talks on Sunday evening, one European source said, with a final sit-down ending abruptly when the Greek authorities put forward their disappointing offer.
All eyes will be on the financial markets on Monday with the feeling now stronger than ever that Greece could be finally heading for an exit from the euro after five years of crisis.
The Athens stock market already crashed six percent on Friday on news that the fed up eurozone nations were making contingency plans for a default by Greece.
That came a day after the IMF announced it had pulled its technical teams from Brussels due to a lack of progress in the talks.
Greece is shattered economically after six year of crisis and despite two rescue programmes since 2010, worth 240 billion euros, mostly in loans owed to its European partners, led by Germany and France.
The small Mediterranean nation is now buried under a mountain of debt equivalent to 180 percent of GDP, or almost twice the country's annual economic output.
To meet the June 30 deadline, a reform deal would have to be resolved by the Thursday meeting of the eurozone's 19 finance ministers, who control the bailout purse-strings.
But any deal also needs to go to many national parliaments, including in European paymaster Germany, where passage is not certain.
Also at the end of the month, Greece faces a huge 1.6 billion euro payment to the IMF with another 6.7 billion euros due the European Central Bank in July and August, which Greek officials have said the government cannot afford.
Up to the collapse of talks, playing hardball seemed to have worked with Athens easing up, at least verbally, on the leftist Syriza government's anti-austerity platform.
"We had promised to negotiate hard with our partners during our election campaign and that's what we did," Economy Minister Giorgos Stathakis was quoted as saying in the Avghi newspaper on Sunday.
But "the idea of a rupture (with Europe) is not in our mandate," he added.
The comments came a day after Tsipras told top officials in his Syriza party that the country "must take up the challenge" of a "difficult compromise".
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