Eurozone finance ministers ended their third emergency meeting in a week without reaching an agreement.
Just before Thursday’s meeting, Greece’s three creditors, the International Monetary Fund (IMF), the European Central Bank (ECB) and European Commission presented an ultimatum and put a final proposal on the table for Greece.
However, the proposal was again declined by the Greek government and consequently, a new meeting on Saturday at 16.00GMT has been set.
Ahead of critical meeting on Saturday, Greek Prime Minister Alexis Tsipras met German Chancellor Angela Merkel and French President Francois Hollande on Friday.
Tsipras informed Merkel and Hollande on the new economic proposals extended by the Greek government. According to a senior Greek official, Tsipras stressed that the “Greek side can not understand the institutions’ insistence on such harsh measures.”
In the meeting the creditors laid out terms in a document that went to Greece on Thursday and was seen by Reuters on Friday.
It said Greece could have €15.5 billion in EU and IMF funding in instalments to see it through to the end of November, including €1.8 billion by Tuesday as soon as the Greek parliament approved the plan, the agency reports.
The total is slightly more than Greece needs to service its debts over the next six months but contains no new money, Reuters added.
German Chancellor Angela Merkel emphasized the seriousness of the next meeting by saying it is “of decisive importance” for a Greek solution. Although Merkel did not speculate on the consequences of failing to reach a deal, she said government leaders could not intervene in the complex negotiations.
In the event that Greece will be unsuccessful in unlocking the next bailout, the country is set to default on a €1.6 billion ($1.79 billion) repayment to the IMF due June 30.
Analysts fear that Greece’s default might cause a bank run and capital controls, which would then force Athens to exit the eurozone, leading to financial turmoil in global markets.
"The door is still open for the Greek side to come with new proposals or accept what is on the table," Eurogroup chairman Jeroen Dijsselbloem told reporters.
Greek Finance Minister Yanis Varoufakis, on the other hand, said that Greece has a moral responsibility in reaching a deal both for his country and for the eurozone.
As uncertainty prevails, investors get discouraged by the lack of progress in Greek debt negotiations, causing volatile market movements. However, due to the support of ECB’s bond buying program the contagion risk of a possible “Grexit” is on a much smaller scale than in 2012.