Greek standoff continues after talks with creditors fail

The Greek government remains in a standoff with its creditors after negotiations failed on Wednesday. Markets began the week extremely hopeful about a Greek deal but optimism is fading and a fresh sense of skepticism is suddenly in play.

Late night talks with the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) ended without agreement. The talks with the Greek Prime Minister Alexis Tsipras ended in the early hours without a deal to end the standoff over bailout aid.

“Unfortunately we’ve not reached an agreement yet but we are determined to continue work,” said Jeroen Dijsselbloem, who chaired the meeting of Eurozone finance ministers.

Significant gaps remain in the negotiations especially in the areas of taxes and spending cuts and pensions.
It was hoped that an agreement would be reached ahead of the two-day summit of EU leaders that begins Thursday in Brussels.

Failure to close a deal by the weekend would increase the chance that Greece would have to impose capital controls to prevent a run on its banks.

Greece needs last installment of bailout deal worth 7 billion euros. Without a deal this week, the country runs the risk of defaulting on its debt payments to the International Monetary Fund, worth 1.5 billion euros due on June 30.

Even if a deal is reached, Tsipras may struggle to secure the needed endorsement of the Greek parliament.

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