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 After late-night talks with the leaders of Germany and France
produced no breakthrough, Tsipras was to meet European Commission
President Jean-Claude Juncker in the afternoon to try to bridge
remaining gaps on a cash-for-reform deal.
"At the end of the talks there was absolute unanimity that Greece
will work intensively and full steam ahead ... in the coming days to
solve all remaining issues," German Chancellor Angela Merkel said on
arrival for the final session of an EU-Latin America summit.
The latest in a run of sleep-defying meetings in recent weeks was
partly political theater, 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. Tsipras
again said he saw a solution at hand.
A senior EU official who has previously been glum on the prospects
of an accord said there was now a good chance that next week would
bring an agreement acceptable to Eurogroup finance ministers, who
meet in Luxembourg on June 18.
To clinch a deal, EU officials said Tsipras's government needed to
offer alternative savings and tax measures to replace proposed
pension cuts and tax rises he rejected as antisocial, to deliver a
modest fiscal surplus before interest payments.
People familiar with the talks said the two sides have come closer
to agreeing a primary surplus target but are still wide apart on how
to achieve it, with EU and IMF experts doubting that measures touted
by Greece can do the job.
But Greek Finance Minister Yanis Varoufakis, sidelined from the
talks after infuriating his euro zone counterparts, denied that
Athens had agreed to a primary surplus target of 1 percent of gross
domestic product sought by the creditors.
As ratings agency Standard & Poor's downgraded Greek bonds deeper
into junk status, questioning whether Athens can or wants to pay its
debts, Tspiras emerged after midnight from talks with Merkel and
President Francois Hollande to express confidence.
"I believe that Europe's political leadership realizes 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,"
he said.
Greek bank shares surged on Thursday, with a major Athens banking
equity index enjoying its best performance in four months, on
renewed expectations of progress in the talks.
The Athens Stock Exchange FTSE Banks Index <.FTATBNK> jumped 14.2
percent, helping push up the broader Greek ATG <.ATG> equity index
by 7 percent.
"GREEK TRAGEDY"
More dire warnings rained down on the Greek leader on Thursday as he
contemplates what concessions to make to clinch a deal without
alienating his left-wing supporters who elected him in January on
promises to put an end to austerity.
"There is a strong determination to help Greece," ECB policymaker
Jens Weidmann, the hawkish chief of Germany's Bundesbank, said in a
speech in London. "But time is running out, and the risk of
insolvency is increasing by the day."
Weidmann said the main losers of a Greek default and exit from the
euro zone would be Greece and the Greek people.
"The contagion effects of such a scenario are certainly better
contained than they were in the past, though they should not be
underestimated," he said.
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EU Economics Commissioner Pierre Moscovici urged Athens to come up
with a list of economic reforms that could make a deal possible in
the coming days. "I really like Greek tragedy, but now we must move
to the happy ending," he said.
French Finance Minister Michel Sapin said neither Greece nor its
partners in the single currency area could afford for the talks to
fail - an argument that irks Germany and its north European allies,
which worry that it lets Athens off the hook.
Merkel had made clear before the meeting with Tsipras that Greece
needed to satisfy the three institutions representing the creditors
- the European Union, European Central Bank and International
Monetary Fund - rather than seeking a political fix on softer terms
from her and Hollande.
Tsipras renewed a call for a restructuring of Athens' debts as part
of any solution. The EU says that can only be considered after a
deal to complete the existing bailout is secured.
Greece will be in default at the end of June without fresh funds to
enable it to repay 1.6 billion euros to the IMF. It put off a
smaller repayment last week under a rarely used IMF rule allowing it
to combine all payments due in any month.
Tsipras has denounced creditors' demands to scrap an income top-up
for the poorest pensioners and to refrain from unilateral moves to
reintroduce collective bargaining or raise the minimum wage -
policies that are anathema for his Syriza party.
As if on cue, a Greek court ruled on Wednesday that the government
should reverse cuts to private sector pensions it made in 2012 as a
condition of its bailout agreement because the reductions deprived
pensioners of the right to a decent life.
Brussels says he is free to put forward alternative measures
provided the numbers add up and yield a primary budget surplus.
He faces pressure not just from left-wing hardliners but also from
Greek voters, most of whom say they want to remain in the euro zone
and want him to make concessions for a deal.
A poll showed a slight rise since April in the number who are
dissatisfied with Tsipras's negotiating performance with the
creditors, reaching 53.4 percent from 50.5 percent.
(Additional reporting by Alastair Macdonald and Jan Strupczewski in
Brussels, Angeliki Koutantou and Karolina Tagaris in Athens; Writing
by Paul Taylor; Editing by Crispian Balmer)
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