Athens is racing against the clock to come up with a debt deal in order to curb a looming default hovering over the country. Over the weekend, Greek Prime Minister Alexis Tsipras sent his negotiating team to Brussels with a final proposal. Thus, without bailout funds, Greece will reject any decision that pushes towards a “Grexit,” he warned.
"If we have a sustainable solution, regardless of how difficult the compromise is, we will bear the burden because the only criteria are exiting the crisis and the bailouts," a government official quoted Tsipras as telling the ministers on Friday night before they headed to Brussels.
The talks which began on Saturday "are continuing today," confirmed European Commission spokeswoman Mina Andreeva, yet the outcome and durations of the meeting is very much uncertain.
Those involved in the debt talks are Tsipras' representatives and the three institutions responsible for managing the Greek bailout - the European Commission, the European Central Bank and the International Monetary Fund.
In the latest proposal, the leftist government seeks to restructure its country’s debts. However, Greece continues to remain stubborn over cuts to its pensions.
"The government seeks a solution which will include a debt relief, low primary surpluses, no wage and pension cuts, an investment package and restarting the economy," told Greece’s Government spokesman Gabriel Sakellaridis to Agora newspaper.
According to Tsipras, writing off or rescheduling a large portion of Greece’s debts is a “sustainable solution” vital to reboot the stalling Greek economy. However, if German Chancellor Angela Merkel shows any acceptance to such an offer, an uproar is expected to soar within Germany, the biggest contributor to Greece's 240 billion euro bailouts.
Another growing risk which weighs down the Greek economy is the country’s banking system, as more people opt to withdraw their savings in order to gain financial security. Greek savers are also wary due to the possible loopholes in the country’s legislation which covers capital controls. If a deal is not settled within the next few days, a wave of capital outflows will force banks to collapse.
“If the Greek government isn’t willing to take difficult measures, even if they’re unpopular, then Greece will never be saved,” Dutch Finance Minister Jeroen Dijsselbloem, who leads the euro-area finance chiefs’ meetings, told reporters in The Hague on Friday. “We’ve repeatedly explained to the Greeks how little time there still is.”
Tsipras warned his country on Saturday to prepare for a "difficult compromise" with its international creditors, as they insist on tough reforms in return for unlocking frozen bailout funds before the June 30 deadline.
Moreover, a German daily reported that the IMF "torpedoed" a recent attempt by European Commission chief Jean-Claude Juncker to offer Greece a compromise proposal in bailout talks.
According to the newspaper's Sunday edition, Junker would have given leeway for Tsipras, allowing the debt burdened country to postpone close to 400 million euros in pension cuts in return for making similar savings on military spending.
Recently, Greek Finance Minister Yanis Varoufakis also proposed a debt swap involving the ESM, Europe's bailout mechanism, which is expected to assist Greece make a further repayment of 6.7 billion euros to the European Central bank over the summer.
In another attempt to strike a deal, Greek officials flew to Brussels days before a meeting of Europe’s finance ministers.
“Where there’s a will there’s a way, but the will has to come from all sides,” Merkel said earlier this week. “That is why I think it’s right that we talk to each other again and again.”