Greece said Friday it will present its creditors with new proposals over the weekend in an attempt to breathe life into stalled bailout discussions that have stoked fears of the country’s bankruptcy.
Confirmation that talks would proceed over the weekend came after the close of play in European markets. Fears that the two sides were as far apart as ever on such issues as pensions and the budget saw the main stock index in Athens close 5.9 percent lower and the Stoxx 50 index of leading European shares end down 1 percent.
A Greek government official indicated a deal with creditors may be nearer than thought after Prime Minister Alexis Tsipras had conferred with senior ministers.
“The Greek side is ready to table counter-proposals to bridge the remaining differences,” a government official said.
The official, who was not authorized to discuss the matter on the record, said Greece believes an agreement is “closer than ever” and that Greek representatives will meet those representing the creditors in Brussels on Saturday.
Pressure on Greece to secure a deal is mounting. Greece’s 240 billion-euro ($270 billion) bailout expires June 30, at which point the country will lose access to the rescue loans it desperately needs to repay debts and avoid a default that could force it out of the euro.
The most dramatic sign of an impasse in the discussions had come on Thursday when the International Monetary Fund sent its negotiators home from bailout talks with Greek officials in Brussels, citing a lack of progress.
The weekend talks come ahead of a meeting late next week of the eurozone’s 19 finance ministers — a meeting that European Union President Donald Tusk has said “is really crucial and should be decisive.”
Despite the lack of visible progress, German Chancellor Angela Merkel has shown a willingness to continue the talks — her views matter perhaps more than most as Germany is Greece’s single biggest creditor.
“Where there’s a will, there’s a way, but the will must come from everybody,” she said in a speech in Berlin. Germany stressed that a solution would have to include the IMF.
Greece’s creditors — its fellow eurozone states, the European Central Bank and the IMF — want the country to commit to new economic reforms before they disburse the last 7.2 billion euros ($8.2 billion) left in Greece’s bailout fund.
The key points of contention appear to be cuts to Greek pensions, changes in the labor market and the size of Greece’s government budget. Jeroen Dijsselbloem, the eurozone’s top official, said the onus was on the Greek government to come up with “sound” proposals.
Greece’s final installment has been pending since last year and with no access to the international borrowing market, Greece has been struggling to pay both its international debts, and to continue paying salaries and pensions.
Without outside help, Greece is unlikely to be able to repay a roughly 1.6 billion-euro IMF debt installment due June 30 and larger debts due to the European Central Bank in July and August.
“We are coming to a head,” said David Mackie of JP Morgan. “Our judgment remains that Greece will offer concessions to get a deal.”
In Germany, there appear to be mixed views about saving Greece.
A poll by the TNS-Emnid agency for the German weekly Focus found that 46 percent of Germans wanted Greece to keep the euro, while 42 percent thought it should return to the drachma. That survey of 1,004 people, conducted over landline phones Monday and Tuesday, has a reported margin of error of 3.6 percentage points.
But another poll, conducted by the Forschungsgruppe Wahlen institute for ZDF television, showed 41 percent of Germans in favor of Greece staying in the eurozone and 51 percent against — a marked shift from the beginning of the year, when it found 55 percent wanted Greece to stay and 33 wanted it to go. That poll of 1,230 people, again over landlines, gave a margin of error of three percentage points.