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Greek PM Tsipras to meet Merkel as debt wrangle continues

Greek Prime Minister Alexis Tsipras hopes to meet German Chancellor Angela Merkel in Brussels on Wednesday. Time is running short over the cash-for-reforms deal that Athens needs to avoid a debt default.

Tsipras and Merkel had planned to meet Wednesday in Brussels on the sidelines of an EU-Latin America summit, but the meeting was later called into question as the leaders' negotiators had difficulty finding common ground on how to cope with Greece's debts.

On Monday, Merkel warned time was running out for Greece, which has until the end of June to reach a reform deal that would unlock the last $7.2 billion euros ($8.1 billion) of critical bailout funds. Athens needs the cash to be able to repay the 1.6 billion euros it owes the International Monetary Fund (IMF) by June 30.

The Greek government came to power in January after campaigning on promises to end years of painful austerity from its bailout programmes. Tsipras and his finance minister, Yanis Varoufakis, have been wrangling with creditors for weeks over the insistence that Athens agree on a reform package that includes sales tax increases and salary and pension cuts to civil servants.

A meeting in Brussels ended last week with Tsipras describing those demands as "absurd."

But on Tuesday Greece finally submitted the promised list of reforms to its EU-IMF creditors, detailing how it plans to cover its funding gap.

The proposals are aimed at "closing the fiscal gap with alternative proposals and identifying a possible plan of sustainability of the Greek debt," said a government statement.

'Grexit' likely followed by Spain, Italy: Tsipras

Any agreement will require the approval of the eurozone's finance ministers, the Eurogroup. Its head, Dutch Finance Minister Jeroen Dijsselbloem, has warned Greece against getting ahead of itself.

"It underestimates the complexity of what is being required from them, to bring the (Greek) budget back in line and get the economy back on track," Dijsselbloem said in a weekly radio address.

On Tuesday, Tsipras warned of the costs to EU taxpayers if his country left the eurozone. In an interview with Italian daily "Corriere della Sera," Tsipras said a so-called "Grexit" would likely be followed by Spain and Italy, precipitating the collapse of the currency bloc.

jr/cmk (AFP, Reuters)

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