Greece, EU powers agree to step up debt talks as crunch looms

Greek Prime Minister Alexis Tsipras shows his watch while leaving the European Council headquarters on the first day of an EU-CELAC Latin America summit in Brussels, Belgium June 11, 2015. European leaders realise Greece needs a viable solution to its debt crisis that allows the country to return to growth, Tsipras said on Thursday, after talks with the leaders of France and Germany. "We decided to intensify the efforts to bridge the remaining differences and proceed, I believe, to a solution in the coming period," Tsipras told reporters after late-night talks in Brussels. [Photo/Agencies]

BRUSSELS - Greek Prime Minister Alexis Tsipras held a new round of late-night talks with the leaders of Germany and France and agreed to intensify negotiations with Athens' creditors ahead of a looming default at the end of the month.

The latest in a run of sleep-defying meetings in recent weeks was partly political theatre, as all involved try to show their commitment to a deal - and avoid any blame for failing to avert a crunch that could unsettle the euro and the world economy. But Tsipras again said he saw a solution at hand.

As ratings agency Standard & Poor's downgraded Greek bonds deeper into junk status, questioning whether Athens can pay its debts, the leftist leader emerged early on Thursday from talks on the sidelines of a summit in Brussels with Chancellor Angela Merkel and President Francois Hollande to express confidence.

"We decided to intensify the efforts to bridge the remaining differences and proceed, I believe, to a solution in the coming period," said Tsipras, whose first five months in government have brought Greece to the brink of defaulting on payments to the IMF if it fails to secure new EU funding within three weeks.

Merkel had made it clear before the meeting, however, that it was not her and Hollande with whom he must negotiate but with the three institutions representing sovereign creditors - the European Union, European Central Bank and International Monetary Fund. There was no change in that line afterwards:

"It was agreed unanimously that the talks between the Greek government and the institutions should be pursued with great intensity," a German government spokesman said in a statement that described a meeting conducted in a constructive atmosphere.

The chairman of euro zone finance ministers said a cash-for-reform deal with Athens was still possible in time for their June 18 meeting, with just a few issues remaining to be solved, but Greek counter-proposals were not yet satisfactory.

Tsipras, elected in January on a platform to end years of creditor-imposed austerity, again stressed his demand for a "political" solution to the crisis. But Merkel and Hollande, speaking for other creditors, insist the place to negotiate is the Brussels Group of technical experts who would then seek political endorsement from the Eurogroup of finance ministers.

"I believe Europe's political leadership realises that we must offer a viable solution to Greece and the possibility to return safely to growth with social cohesion and with a sustainable debt," Tsipras said, renewing a call for a reworking of Athens' debts that the EU says can come only after a deal.