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Greece deal nears as PM warns of eurozone collapse

Update: June, 10/2015 - 12:16

BRUSSELS — The EU's top official for the euro said on Tuesday that Greece and its creditors could be just days from reaching a bailout deal as Prime Minister Alexis Tsipras warned that failure could sink the eurozone.

Cash-strapped Greece submitted new proposals on Tuesday to end a standoff with the EU and IMF, which have demanded tough reforms in exchange for giving Athens the final 7.2 billion euros (US$8.1 billion) of its bailout funds.

The international rescue package expires at the end of the month, and Athens desperately needs the cash to avoid a default and a possible messy exit from Europe's 19-country single currency area.

"I would say that reaching the agreement within coming days is possible," Valdis Dombrovskis, the EU vice president for the euro told reporters.

But he urged the Greeks to show "less tactical manoeuvring and more work on substance" to seal a deal.

European sources said Greece was still refusing budget targets that the European Union and the International Monetary Fund see as sacrosanct.

Radical leftist leader Tsipras has requested a meeting with German Chancellor Angela Merkel and French President Francois Hollande on the sidelines of an EU-Latin American summit on Wednesday to discuss the crisis.

'Waste of time'

But a huge gulf remains between creditors and the Greek government, which came to power in January on the back of promises to end five years of painful austerity measures resulting from bailout programmes.

European Commission chief Jean-Claude Juncker is unlikely to be present at Wednesday's meeting, after his own head-to-head with Tsipras last week in Brussels disastrously ended with the Greek premier dismissing Juncker's "absurd proposal".

Juncker told fellow European commissioners on Tuesday that a new Tsipras meeting would be a "waste of time" and that it would be "better to meet with the Latin Americans," an EU source said.

Meanwhile in Athens, Tsipras issued a dire warning that the fate of the eurozone, the central plank of a European project formed in the ashes of World War II, was at stake if the negotiations fail.

"I think that is evident. It would be the beginning of the end for the eurozone," Tsipras told the Italian newspaper Corriere della Sera.

Yet Tsipras is also facing huge pressure at home from the hard-line wing of his own Syriza party, which has vowed to resist any attempt to bow to the demands of Greece's creditors.

He urged his party during a closed door meeting on Tuesday to "back the efforts of the government" saying that they were at the most "crucial and substantial point in the negotiations", according to the semi-official Ana news agency. — AFP

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