Greece given weekend deadline after talks fail
Greece's international creditors, the European Central Bank, the European Commission and the International Monetary Fund (IMF) gave the Hellenic nation a weekend deadline to avoid default, after failing to reach an agreement on Thursday.
Eurozone finance ministers ended the third meeting in a week without a deal that would allow Greece to unlock further aid and avoid a default on 30 June, when it is due to pay €1.6bn to the IMF.
Read more: Greek default possible after 30 June, IMF says
German Chancellor Angela Merkel said a Eurogroup meeting on Saturday would be decisive for finding a solution for the Greek crisis, adding that an agreement must be reached before markets open on Monday morning.
"We are saying, not without careful thought, that this Eurogroup is of decisive importance, taking into account that time is very short and that a result must be worked on," Merkel said early on Friday.
The door is open for Greece to come with new proposals otr accept what is on the table
Eurogroup chairman Jeroen Dijsselbloem said that the door was still “open” for Greece to come with new proposals “or accept what is on the table".
Greek officials commented that they had already modified their reform proposals offering to raise taxes and pension deductions.
Greek Finance Minister Yanis Varoufakis showed his hope on striking an agreement.
"The institutions are going to look again at the two documents - our documents and their own. There will be discussions with the Greek government and we'll continue until we find a solution," Varoufakis said.
If Saturday's talks fail, the ECB is expected to withdraw its emergency liquidity assistance (ELA) to the Greek banking system, in a move that would force Athens government to impose capital controls to prevent capital flight.
Read more: Greek bank deposit withdrawals top one billion euros in 24-hours
Nobody wants to be left holding the smoking gun of Greece’s default and exit from the euro
“It doesn’t look too hopeful that an agreement will be reached on Saturday,” CMC Markets analyst UK Jasper Lawler commented. Nevertheless, he added that “nobody wants to be left holding the smoking gun of Greece’s default and exit from the euro, so it seems likely that another arbitrary extension date will emerge before 30 June".
OANDA analyst Craig Erlam believes the opposite, pointing out that “while until now people have just assumed the deadline will be pushed back – a relatively safe assumption until now given the tendency to do so – it will be very difficult to do so on this occasion”. Therefore, he added that the lack of a deal on Sunday “could cause significant market distress".
You may also enjoy reading:
Greece considers creditors' proposal a "blackmail" as Eurogroup negotiations fail
Tsipras bemoans creditors' 'strange attitude' as Greek proposal is rebuffed