Greece fails to reach agreement with European creditors

No deal has been reached at the meeting between Greece and its creditors on the bailout that the country needs to prevent default on its debts, a leading European Union official has said.

“Regrettably … too little progress has been made. No agreement is in sight,” Jeroen Dijsselbloem, chairman of the Eurogroup, said on Thursday.

Ministers sent a strong signal that it was up to Greece to make new proposals, he said.

European Council President Donald Tusk said in a statement that he had summoned heads of state and government of the euro area to meet in Brussels at 1700 GMT on Monday.

“It is time to urgently discuss the situation of Greece at the highest political level,” Tusk said.

Yanis Varoufakis, Greek finance minister, blamed Tusk for choosing to focus on the Greek side’s responsibilities and not the responsibilities of all sides.

He conceded that time was pressing for the country to secure the deal, but said he believed the agreement that would be acceptable for all could still be reached.

Greece needs more loans from its creditors before June 30, when its bailout programme expires and it is scheduled to make a debt repayment worth about $1.8 bn to the International Monetary Fund (IMF). The creditors want Greece to make economic reforms but Athens is baulking.

On the eve of the Luxembourg talks, Alexis Tsipras, Greek prime minister, described demands by the country’s rescue lenders to slash pensions “incomprehensible”.

Tsipras’ five-month-old left-wing government wants new terms for its bailout programme after previous administrations imposed draconian spending cuts and tax increases for five years. Those austerity measures helped reduce the public deficit but ravaged the economy and made most Greeks poorer.

EU officials said they had already lowered their demands for a primary budget surplus this year from three percent to one percent and agreed to make the increase in the surplus over the next years more gradual. A primary surplus is how much a government earns when not counting the costs of interest payments on debt.

If Greece ends up defaulting on its debt, the bankruptcy procedure is expected to prompt the country’s messy exit from the Eurozone and even the European Union.

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.