European Central Bank (ECB) chief Mario Draghi has called on Greece and its creditors to intensify efforts toward an aid-for-reforms deal following another round of inconclusive talks that sent stock markets reeling.
Speaking before the European Parliament in Brussels on Monday, Mario Draghi urged all sides in the negotiations on Greece "to go the extra mile," but he insisted that it was now up to Athens to break the deadlock in the talks.
Calling for a "strong and credible agreement," Draghi told EU lawmakers that this was not only in the interest of Greece, but the euro area as a whole.
"While all actors will now need to go the extra mile, the ball lies squarely in the camp of the Greek government to take the necessary steps," Draghi said during a hearing in the European Parliament's Committee on Economic and Monetary Affairs.
Draghi's call came after debt talks between Greece and its international creditors broke down again on Sunday. The collapse in negotiations triggered warnings that cash-strapped Athens may soon run of money and default on more than 320 billion euros ($360 billion) in debt.
Eurogroup finance ministers are reportedly now explicitly discussing the possibility of a Grexit scenario - something officials had vehemently denied until last Friday.
Meanwhile, the finger-pointing continued on Monday.
"They came with their hands in their pockets," news agency AFP quoted one EU source close to the negotiations as saying after the meeting, while one Greek official dismissed creditors' demands as "irrational."
On Monday, Greek Prime Minister Alexis Tsipras told the country's Efimerida ton Syntakton daily that he would wait "patiently" until foreign paymasters "become realistic."
At the heart of the cash-for-reforms dispute is lenders' demand that Athens implement tough pension cuts. However, Tsipras has repeatedly rejected this, knowing it could cost his leftist-led government dearly. His Syriza party was swept to power in January after pledging voters to end years of austerity, which many blame for the country's ails.
Tsipras comments came ahead of a crucial meeting on Thursday, when Eurogroup officials will continue discussions about whether or not to unlock the final 7.2 billion-euro tranche of Greece's 240 billion-euro bailout.
State of emergency
As Greece careens toward an end-of-the-month deadline to deliver on a big debt repayment, French President Francois Holland on Monday warned of the risk of "turbulence" if a deal is not reached soon.
"Greece must not wait...there's not a moment to lose," he said during a visit to the Paris Air Show.
Despite the bleak outlook, Greek Finance Minister Yanis Varoufakis told the German tabloid Bild on Monday that he remained confident an agreement could be reached "in one night," provided German Chancellor Angela Merkel attended the meeting.
However, he stressed that the solution wasn't more money - Athens had already received "far too much," he said. Rather, he said, lenders must agree to restructure Greece's debt to allow for less austerity.
"There's no way around it: We have to start all over again. We have to make a clean sweep."
Fears that Greece could default and drop out of the eurozone again sent ripples across European markets on Monday as Athens geared up for a decisive week in the often fraught negotiations with its creditors.
While the eurozone's blue-chip Eurostoxx 50 slumped 2 per cent to 3,432 points, shares in Athens plunged by more than 6 percent. Germany's DAX retreated 1.7 percent, leaving the index some 11 percent below a record high set in April.
"It does look like a technical default is in sight at the end of the month and the market could see a significant pullback," Peter Cardillo, chief market economist at Rockwell Global Capital in New York told the Reuters news agency.
The Dow Jones industrial average fell almost 1 percent in early trading Monday, while the S&P 500 was down 0.78 percent. In addition, volatitlity in US and European share markets - a measure of investor anxiety - increased significantly with the US-based CBOE index rising 10.5 percent and its European equivalent surging 10.7 percent - the highest reading since January.
In the currency market, the euro fell against the dollar, down 0.3 percent to $1.1240, yet recovering from an earlier intraday low of $1.1188.
uhe/cjc (AFP, dpa, Reuters)