Greece's Tsipras summons cabinet as debt deadline nears

Fri Jun 26, 2015 3:21pm EDT
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By Renee Maltezou and Jan Strupczewski

BRUSSELS/ATHENS (Reuters) - Greek Prime Minister Alexis Tsipras summoned an urgent meeting of his cabinet on Friday after euro zone partners warned Athens it had until the weekend to accept a cash-for-reform deal or plunge toward default.

Despite angry rhetoric and accusations of "blackmail", negotiations were continuing in Brussels to find a last-ditch compromise to keep Greece in the euro zone to avoid a political train-wreck, economic chaos and financial market disruption.

Greek Finance Minister Yanis Varoufakis expressed frustration with the stance adopted by lenders, whom he accused of toughening their demands every time Greece made a concession but said the differences could still be bridged.

He said there was no foundation for the increasing speculation in Athens that Tsipras could call snap elections if a deal cannot be reached.

"There is no reason for a referendum or elections, or a failure in the negotiation. Common sense demands a deal," he told Greece Antenna TV.

In a carrot-and-stick approach, the euro zone offered to release billions in frozen aid if Greece accepted and implemented pension and tax reforms that are anathema to its leftist government, elected in January on a promise to end austerity.

They also made a gesture toward Tsipras' demands for debt relief by offering to reaffirm a 2012 pledge to consider stretching out loan maturities, lowering interest rates and extending an interest payment moratorium on euro zone loans to Greece, a senior EU official said.

However, a Greek government official rejected as "totally inadequate" the creditors' offer to extend its existing bailout program by five months, as the leftist premier flew home to Athens.   Continued...

Greek Prime Minister Alexis Tsipras, Italian Prime Minister Matteo Renzi and German Chancellor Angela Merkel attend a European Union leaders summit in Brussels, Belgium, June 25, 2015. REUTERS/Yves Herman