Greece failed to agree on its long-standing debt negotiations with international creditors, including the International Monetary Fund (IMF) and the European Central Bank (ECB), on Sunday, for which the European Union (EU) blamed on Athens.
The EU said that Greece has failed to offer anything new to secure the funding it needs to repay 1.6 billion euros to the IMF, a failure which could lead Athens’ debt default, hereby, threatens its future in the eurozone.
Athens stated that it was ready to continue colicky talks, but the EU and IMF officials refused to maintain negotiations since they were “not authorized to negotiate further.”
Greek side also insisted that it will never capitulate in the demands for more pension and wage cuts on which the talks were knotted during the past several months of talks.
"This is very disappointing and sad. It was a last attempt to bridge our differences but the gap is too large. One can discuss a gap, but this is an ocean," a person who was close to the talks told Reuters.
Greece’s left-wing Syriza Party have so far not agreed on a number of issues, such as debt restructuring, a lower target for the primary surplus to take in more than it spends apart from debt interest payments, and a pledge to make no further cuts to pensions or wages.
The EU Commission said that euro zone finance ministers would focus on the issue to cope with when they meet on Thursday.
Greece and its international debt creditors had agreed to expire the negotiations due June 30 after the Greek side declared that it would not be able to fulfill repayment of 300 million euros to the IMF on a June 5 deadline.
Athens has been negotiating with the creditors, the IMF and the ECB, over the past four months about the release of some 7.2 billion euros in aid.
The country is heavily indebted to the EU and the IMF, almost 240 billion Euros, since the eurozone economic crisis seriously hit the country’s economy from 2009 to the present.
The failure of negotiations would lead Greece to default, one of the most likely scenarios which might also mark a historic blow to the EU's most ambitious project, the common currency usage, Euro.
The euro slipped on Monday about 0.4 percent to US$ 1.1235 , and was down 0.4 percent against the Japanese yen at 138.49, after the parties failed to agree at the weekend.
Finance ministers from 19 eurozone countries will be gathered this week in Luxembourg to discuss the Greek repayment issues which are enormously important to keep Athens inside the eurozone, as well as the future of the monetary union.
As the negotiations straddled mostly due to the upbeat tone of the Greek government, Greece’s already dying financial stability raised concerns and skepticism of the international crediting institutions.
Standard & Poor's decided to downgrade the country’s credit rating one notch further into junk territory to triple-C from CCC+ on Wednesday, as the international creditor stated that Greece is very likely to default in one year unless Athens seal a deal with its lenders.