Greek Prime Minister Alexis Tsipras insists his government will stand its ground against proposals demanded by creditors, as markets across Europe slide further into the red.
City analysts now see a default and Greek exit from the Eurozone as an increasingly likely outcome.
“We will patiently wait for the institutions [to] adhere to realism,” Tsipras said yesterday.
“We are shouldering the dignity of our people, as well as the hopes of the people of Europe. We cannot ignore this responsibility. This is not a matter of ideological stubbornness. This is about democracy. We do not have the right to bury European democracy in the place where it was born.”
European Central Bank chief Mario Draghi yesterday echoed the view of many European officials when he said “the ball lies squarely in the camp of the Greek government to take the necessary steps [for a deal to happen]”.
However, the remarks were rebuffed by Greece. A spokesman for the Greek finance ministry told City A.M.: “They keep saying the ball is in Greece’s court, but it is not, it’s always been on them. The measures they are demanding are inapplicable.”
The prospect of Greece defaulting on repayments due this month to the IMF is rising with every day that passes without progress. A failure to find the cash could lead to a so-called Grexit.
“It could go either way; it’s the closest we’ve been to Grexit since this all began,” said Raoul Ruparel, a co-director of think tank Open Europe.
A lack of consistency among Greece’s creditors has hindered talks, Ruparel said – but he added that this is partly Greece’s fault. In February, both sides agreed to seek a short-term deal that would tide Greece over until a longer-term arrangement could be made. But the Greeks have now intertwined the two, he added. “The Greeks are trying to bring all the timelines together. By focusing on the long-term they’re exposing the creditors’ divisions.”
The showdown could reach breaking point on Thursday when Eurozone finance minister meet in Luxembourg.