Greece Fails to Agree on Cash-for Reforms Deal with Creditors, Grexit Fears Mount

European Commission President Jean-Claude Juncker (R) welcomes Greek Prime Minister Alexis Tsipras (L) prior to a meeting at the EU commission headquarters in Brussels, Belgium, 3 June 2015. EPA/BGNES

Greek and EU officials have failed to hammer out a cash-for-reforms deal at the latest round of their talks in Brussels on Sunday.

“While some progress was made, the talks did not succeed as there remains a significant gap,” the European Commission said.

Cash-strapped Greece is struggling to agree a deal with its international creditors from the Eurozone and the International Monetary Fund before the end of June to unlock crucial bailout financing and avert a default.

The BBC quoted a Commission spokesman as saying: "President Juncker remains convinced that with stronger reform efforts on the Greek side and political will on all sides, a solution can still be found before the end of the month."

Greece is seeking to unlock bailout funding to avoid defaulting on a EUR 1.5 B debt repayment to the IMF due by end-June.

Meanwhile, Germany on Sunday issued its most serious warning yet that Greece could eventually exit the euro zone.

 “The shadow of a Greek exit from the euro zone is becoming increasingly perceptible,” Bloomberg quoted German Economy Minister and Vice-Chancellor Sigmar Gabriel as saying in an opinion column to be published by Bild newspaper on Monday. “Greece’s game theorists are gambling the future of their country. And Europe’s too.”

Spending and overhaul plans presented by the Greek government at Sunday’s talks still remain as much as EUR 2 B a year short of what its creditors have demanded, according to European Commission spokeswoman Annika Breidthardt.

No more talks between the left-wing government in Athens and the EU are planned until Thursday’s meeting of euro zone finance ministers in Luxembourg, Breidthardt added.