Greek debt talks: LIVE REPORT

15:06 GMT – AFP IS NOW CLOSING the Live Report on the Greek debt talks after Athens and its EU-IMF creditors failed to break the deadlock in emergency talks to reach a bailout deal, raising fresh fears of a default.

Greece needs creditors to unlock the remaining funds in its bailout to pay a 1.5 billion euro ($1.7 billion) debt payment to the IMF but the lenders have refused until Athens agrees to new spending cuts and reforms.

The IMF says it believes Greece will make the payment scheduled for June 30.

Sources said finance ministers are likely to meet again on Saturday.

15:06 GMT – Saturday meeting? – Eurogroup ministers are likely to meet again on Saturday, three EU sources tell AFP

15:03 GMT – Marathon extended – The Greek debt marathon looks like dragging on for another few kilometres as Eurogroup finance ministers break up talks and sources tell AFP the ministers will meet again on Saturday.

15:01 GMT – IMF ‘working intensively’ – The IMF’s Rice says strenuous efforts are being made to reach agreement with Athens over what creditors want in exchange for funding, as well as what additional support creditors will offer.

That includes a combination of reforms on the Greek side and additional financing from the Europeans, he noted.

“We’ve been calling for a balanced approach and for all sides to play their part,” Rice said.

“We are working intensively, as hard as we can, night and day, to achieve a deal.”

14:46 GMT – IMF ‘give and take’ – The IMF’s Rice denies the IMF has taken a “take it or leave it” stance on the new terms for releasing funds to Greece under its bailout deal, which include difficult tax hikes and spending cuts.

“The IMF doesn’t do ‘take it or leave it.’… That’s not how we work with our member countries. It’s always give and take,” Rice says, when asked by reporters if it has given Greece such an ultimatum.

14:44 GMT – ‘That’s it for today’ – Talks between eurozone finance ministers break up without agreement on a Greek debt deal, with a new meeting due in coming days, Finland’s Alexander Stubb says.

“That’s it for today. Institutions and Greece to continue work. Eurogroup back later, but not today,” Stubb tweets after the talks in Brussels, which had been supposed to thrash out a deal for EU leaders to approve at a summit.

14:43 GMT – IMF expects payment – The International Monetary Fund says that it expects Greece will make a 1.5 billion euro debt payment scheduled for June 30, as Athens continues to negotiate with creditors.

Talk of a default is “all speculation, because we’re expecting the payment to be made on June 30 and that’s what the Greek authorities have said publicly,” says Fund spokesman Gerry Rice.

– Eurogroup meeting over –

14:38 GMT – EUROGROUP TALKS FINISH WITH NO DEAL, TO MEET IN COMING DAYS: FINLAND

14:36 GMT – UK one-liner – A senior EU official expects British reforms to take up one line in the summit communique, Haddon reports.

“They will decide what is the timeframe and how this process should be organised in the four months to come,” the official told her.

Downing Street expects Cameron will have spoken to all 27 other EU leaders, mostly in person, by the time the summit starts.

There was even a call scheduled with Alexis Tsipras, Haddon says.

14:33 GMT – Cameron sidelined – British Prime Minister David Cameron arrived at the summit to find his referendum reform push sidelined by twin crises over Greece and migration, AFP’s Katherine Haddon reports.

Rather than a lengthy conversation about the reforms Britain wants, sources have told Haddon they expect European leaders to discuss the issue only briefly tonight before agreeing to move to the next stage in the process — technical talks.

14:31 GMT – IMF SAYS IT EXPECTS GREECE WILL MAKE JUNE 30 PAYMENT

14:24 GMT – Smiling Tsipras – Tsipras arrives at the summit with a big smile, in an open-necked shirt as usual. He taps on the arm of Angela Merkel in a very affable way, Mathilde Richter says.

14:17 GMT – ‘Going backwards’ – “We haven’t yet made the necessary progress. In some places we’re going backwards,” Merkel complains after saying the leaders wouldn’t interfere in the talks.

14:13 GMT – ‘Creditors moving goalposts’ – More from economist Krugman: “What do the creditors, and in particular the IMF, think they’re doing? This ought to be a negotiation about targets for the primary surplus, and then about debt relief that heads off endless future crises…

“But the creditors keep rejecting Greek proposals on the grounds that they rely too much on taxes and not enough on spending cuts. So we’re still in the business of dictating domestic policy…

“Right now it’s the creditors, much more than the Greeks, who keep moving the goalposts.…. At this point it’s time to stop talking about ‘Graccident’,” Krugman blasts in his New York Times blog.

14:11 GMT – ‘Graccident’ ruled out – “If Grexit happens it will be because the creditors, or at least the IMF, want it to happen,” economics Nobel prize winner Paul Krugman has written in his New York Times blog.

14:07 GMT – Tsipras confident – Alexis Tsipras says he is confident of reaching a compromise with his country’s EU-IMF creditors despite a deadlock in talks to reach a debt deal.

“After the comprehensive Greek proposals, I’m confident we’ll reach a compromise that will help the eurozone and Greece to overcome the crisis,” Tsipras told reporters as he arrived for the EU summit.

– Greek PM –

14:04 GMT – ‘Greco-compatible’ deal – European Commission head Jean-Claude Juncker vows to work “until the last minute” to obtain a “euro-compatible and Greco-compatible” deal, AFP’s Mathilde Richter reports

14:01 GMT – ‘Not far from deal’ – French President Francois Hollande, entering the summit, says: “We are not far away” from a deal and “the earlier the better”.

13:59 GMT – GREECE’S TSIPRAS ‘CONFIDENT WE’LL REACH A COMPROMISE IN DEBT DEAL’

13:57 GMT – Seizing a deal – More from Belgium’s Michel: “I continue to hope that it will be possible to seize an agreement in the coming hours and if we don’t make it, we must work in the coming days and certainly this weekend.”

13:53 GMT – Neighbourly meetings – It is a busy afternoon at EU headquarters in Brussels, with the EU summit taking place in one chamber while the high-stakes eurozone finance ministers gathering is held in a building next door.

The leaders’ talks will deal primarily with the Mediterranean migrant crisis and plans by Britain to hold a vote on remaining in the European Union.

13:50 GMT – Merkel keeping out of it – German Chancellor Angela Merkel assures journalists as she enters the summit that EU leaders “won’t interfere” in the Greek debt talks as it is a matter for finance ministers. It’s not certain that Alexis Tsipras sees things the same way.

13:37 GMT – Parliamentary approval – Athens has warned that any accord will need to be approved by parliament by next Tuesday, which risks splitting Tsipras’s Syriza party, where many on the left wing view him as reneging on campaign promises.

13:34 GMT – Taverna tax – Despite Athens’ fears for its tourism sector, creditors are sticking to demands for a 23 percent value-added tax rate for restaurants, instead of the current 13 percent.

Creditors also propose to increase the corporation tax rate and they want defence expenditure to be slashed by 400 million euros instead of the proposed 200 million euros.

– Tourism –

13:33 GMT – Latest proposals – New plans submitted Sunday by Greece aim to make eight billion euros in savings, mostly through new taxes on the wealthy and businesses, VAT increases and a cut in defence spending.

But in counter-proposals handed to Greece yesterday, creditors are calling for early retirement to be abolished and an increase in the retirement age from 62 to 67 by 2022, not 2025.

13:20 GMT – Weekend deal? – Belgian Prime Minister Charles Michel, arriving for the summit, says the talks are “fragile, difficult” and mentions “the weekend” as the possible time frame for a deal, AFP’s Mathilde Richter reports

13:13 GMT – Positive forecast – EU President Donald Tusk says he feels the talks to reach a deal on Greece’s debt will end soon with a positive outcome.

“Work is under way and it can still take many hours. But I have a hunch that unlike in Sophocles’ tragedies, this story will have a happy end,” Tusk said as he arrived in Brussels for the two-day EU leaders’ summit.

– Eurogroup meets –

13:13 GMT – Saga – Today’s talks are the culmination of a five-month stand-off between Tsipras’s anti-austerity Greek government and the creditors, who have refused to release 7.2 billion euros in bailout funds unless Greece promises new reforms.

13:12 GMT – Cash injection – Last week, ECB chief Mario Draghi said the central bank liquidity extended so far to Greek banks amounted to around 118 billion euros ($132 billion), or around 66 percent of Greece’s gross domestic product (GDP) and the highest level as a share of GDP of any euro area country.

13:10 GMT – Greek banks stable – The Bank of Greece has not requested extra liquidity from the European Central Bank today, reflecting a stabilisation in deposit withdrawals, a source close to the matter tells AFP.

Greek bank deposit withdrawals “were not significant” in recent days, the source adds.

13:07 GMT – Summit tonight – Ministers still hope to finalise a deal in time to have it approved by EU leaders meeting at a summit in Brussels tonight, ahead of a June 30 payment deadline for a 1.5-billion-euro ($1.7 billion) IMF loan repayment.

13:05 GMT – EU’S TUSK PREDICTS ‘HAPPY END’ TO GREECE DEBT TALKS

12:56 GMT – WELCOME TO AFP’S LIVE REPORT on talks in Brussels aimed at avoiding an imminent debt default by Greece.

Greece and its EU-IMF creditors prepared to submit rival proposals to a meeting of eurozone finance ministers due to start in early afternoon.

Difficult talks that stretched late into the night on Wednesday failed to produce a breakthrough, as cash-strapped Greece’s negotiators rejected reforms demanded by EU-IMF lenders.

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