Greece failed again to clinch a deal with its international creditors on Thursday, setting up a last-ditch effort on Saturday to avert a default next week or start preparing to protect the euro zone from financial market turmoil. Euro zone finance ministers ended their third meeting in a week without agreement after the three creditor institutions put a final cash-for-reform proposal on the table in a showdown with Athens’s leftist government.
German Chancellor Angela Merkel, whose country is Greece’s biggest creditor, said the next meeting of Eurogroup ministers on Saturday would be “of decisive importance” for a Greek solution since time was running out. She declined to speculate about what would happen if there was no deal but said government leaders could not intervene in the complex negotiations, and there was no new money beyond what was left in Athens’ frozen bailout program.
Without a deal at the weekend to unlock frozen aid, Greece, which has received two bailouts worth 240 billion euros since 2010, is set to default on a crucial repayment to the International Monetary Fund next Tuesday. That could trigger a bank run and capital controls, possibly setting Athens on a path out of the euro zone and undermining the founding principle that membership is irrevocable.