Greece, creditors consult before make-or-break meeting

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Greek and European union flags flutters in front of the Acropolis in Athens on November 5, 2013

Greek and European union flags flutters in front of the Acropolis in Athens on November 5, 2013 (AFP Photo/Louisa Gouliamaki)

Brussels (AFP) - Greek and EU officials met for talks Saturday ahead of a high-stakes show-down over Athens' demands for a radical restructuring of its massive international bailout programme.

"It is not a negotiation but an exchange of views to better understand each other's position," an EU official said of the final huddle before next week's crunch meeting.

"The talks are ongoing and the institutions are expected to report at the Eurogroup on Monday," the official said, without giving further details.

No discussions are scheduled for Sunday, with the parties reporting back to their governments to complete preparations for Monday's meeting of the 19 eurozone finance ministers at 1400 GMT.

The consultations began Friday after new hard-left Greek Prime Minister Alexis Tsipras laid out his plans to his peers, including Europe's sceptical paymaster German Chancellor Angela Merkel, at his first European Union summit.

Merkel recognised the need for compromise on all sides, but also called for Greece to respect the conditions of the bailout -- a position that neatly encapsulated both sides in the stand-off.

Dutch Finance Minister and Eurogroup head Jeroen Dijsselbloem said Friday he was "pessimistic" of any quick deal.

"The Greeks have sky-high ambitions. The possibilities, given the state of the Greek economy, are limited," Dijsselbloem said in describing the difficulties in finding common ground.

"I don't know if we'll get there by Monday," he added.

The EU and the International Monetary Fund bailed Greece out in 2010, and then again in 2012 to the tune of some 240 billion euros, plus a debt write-down worth more than 100 billion euros ($113 billion).

The rescue may have kept Greece in the eurozone, but it also left Athens with a mountain of debt worth about 315 billion euros that most analysts do not believe will ever be fully repaid.

In return for the bailouts, the then centre-right Greek government agreed to a series of stinging austerity measures, and the much-resented oversight by the EU, IMF and European Central Bank 'troika' to make sure Greece stuck to the terms.

Tsipras campaigned and won elections last month on promises to ditch the programme, which he said had wrecked the economy, not helped it, and sent the jobless rate soaring.

In a more conciliatory move, however, Athens also said it could live with 70 percent of the current programme, but that Greece must be allowed leeway on the rest so it can do more to boost the economy, including through additional spending.

Time is pressing to resolve the impasse amid fears that failure could force Greece out of the eurozone, with potentially disastrous consequences for all concerned.

The country's current debt rescue expires at the end of this month, and the ECB has signalled it is unwilling to offer Greece the cheap funding to keep its banking system afloat if there is no new arrangement between Athens and its creditors.