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Greece and creditors fail to secure bailout deal

Published 18/06/2015

Greek Finance Minister Yanis Varoufakis gives a press conference at the end of a eurozone finance ministers meeting at the European Union Council headquarters in Luxembourg on June 18, 2015. AFP/Getty Images
Greek Finance Minister Yanis Varoufakis gives a press conference at the end of a eurozone finance ministers meeting at the European Union Council headquarters in Luxembourg on June 18, 2015. AFP/Getty Images
Greece could face exit from the EU if a bailout deal is not secured

Greece and its international creditors have failed to secure a bailout deal that would help the country avoid a debt default at the end of the month, a leading European Union (EU) official has said.

Valdis Dombrovskis, an EU vice-president whose remit includes the euro, wrote on his official Twitter account that there was no deal at the meeting of the eurozone's 19 finance ministers in Luxembourg.

He added that there was a strong signal for Greece "to engage seriously in negotiations".

Mr Dombrovskis added that the group of eurozone finance ministers "stands ready to reconvene at any moment".

Bailout talks with Greece have yielded very little and no agreement is in sight yet, the eurozone's top official has said.

Eurogroup president Jeroen Dijsselbloem said Greek finance minister Yanis Varoufakis presented too few measures that were credible and serious at a meeting today.

The talks over the last week have not progressed and "time is running out", Mr Dijsselbloem said.

He added it is up to the Greeks to submit new proposals in the coming days.

Greece is in talks to get more loans from its creditors - which include the eurozone states and the International Monetary Fund (IMF).

Without help, Greece will struggle to make a debt repayment on June 30.

Greek Finance Minister Yianis Varoufakis listens to Prime Minister addressing his MP's and ministers at the Greek Parliament in Athens on June 16, 2015. AFP/Getty Images
Greek Finance Minister Yianis Varoufakis listens to Prime Minister addressing his MP's and ministers at the Greek Parliament in Athens on June 16, 2015. AFP/Getty Images

Earlier Valdis Dombrovskis, an EU vice-president whose remit includes the euro, wrote on his official Twitter account that there was no deal at the meeting of the eurozone's 19 finance ministers in Luxembourg.

He added that there was a strong signal for Greece "to engage seriously in negotiations".

Mr Dombrovskis added that the group of eurozone finance ministers "stands ready to reconvene at any moment".

Greece is facing intense pressure from its international creditors to break the deadlock.

As finance ministers from the 19-country eurozone headed into a meeting along with the heads of the International Monetary Fund and the European Central Bank, optimism was in short supply.

Greece was told it could not delay its debt repayment to the IMF on June 30 and that its creditors were looking at a plan B - code for a Greek exit from the euro.

Officials acknowledged that a so-called "Grexit" was now being discussed and that contingency plans were being made.

As fears of a potential Grexit have swelled, there have been signs that Greeks are withdrawing money from their banks in ever-increasing amounts.

Greece's government has been locked in discussions with international creditors since its election in January over what economic reforms and budget cuts it needs to make to get the remaining 7.2 billion euro (£5.2bn) available in its bailout fund. It needs the money to pay upcoming debts - first and foremost 1.6 billion euro (£1.1bn) due to the IMF at the end of the month.

That payment to the IMF is not up for negotiation, the IMF's managing director, Christine Lagarde, said.

"There is no period of grace of one or two months as I have read here and there," she said.

"It's due on June 30."

The Greek government wants an end to the budget austerity measures that have accompanied the country's bailout loans for five years.

It has also been seeking some sort of restructuring of the country's sky-high debt burden, which stands at near 180% of annual GDP.

That could take the form of lower interest rates on the debt or extending the date by which the debts have to be repaid.

French Finance Minister Michel Sapin said the "differences can be overcome" and that "the differences are not as great as people say".

The blame game over the impasse in Greece's talks has gotten louder in recent days, with both sides claiming they've gone a long way to secure a deal.

Greece has been adamant it won't back any deal that cuts pensions while European officials say they've made compromises by, for example, dropping a budget surplus target from 3% of GDP to 1% this year.

Further reading

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Advice for those travelling to Greece: Should holidaymakers be anxious?  

IMF data shows Iceland's economy recovered after it imprisoned bankers and let banks go bust - instead of bailing them out  

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