Greece and Creditors Both Dig in after Debt Talks

Greece and its creditors hardened their stances on Monday after the collapse of talks aimed at preventing a default and possible euro exit, prompting Germany’s EU commissioner to say the time had come to prepare for a “state of emergency”.  Prime Minister Alexis Tsipras ignored pleas from European leaders to act fast. Instead he blamed creditors for Sunday’s breakdown of the cash-for-reform talks, the biggest setback in long-running negotiations to unlock aid. He said his government had a responsibility to defend Greece’s dignity and would resist demands for further pension cuts.

“It is not a matter of ideological stubbornness. It has to do with democracy,” said the 40-year-old leftist, who was elected on a pledge to end austerity.  Athens now has just two weeks to find a way out of the impasse before it faces a 1.6 billion euro repayment due to the International Monetary Fund, potentially leaving it out of cash, unable to borrow and dangling on the edge of the currency area.

Germany and other creditor nations demanded that Athens come to its senses and offer new proposals.  “It won’t work that Greece sets the terms and says ‘everyone has to dance to our tune’. Greece needs to get back to reality,” Volker Kauder, parliamentary floor leader of Chancellor Angela Merkel’s conservatives, told ARD television.