Greek Prime Minister Alexis Tsipras renewed his diplomatic offensive Wednesday to try to persuade European creditors to pay out the bailout loans the country needs to avoid default.
The creditors have made it clear that Greece has to improve its offer of economic reforms before they release 7.2 billion euros ($8.1 billion) the country needs to pay debts due at the end of the month.
Tsipras had a short meeting with EU Commission President Jean-Claude Juncker and entered another one with German Chancellor Angela Merkel and French President Francois Hollande on the sidelines of a European Union-Latin America summit late Wednesday. He planned to continue talks with Juncker on Thursday.
Wednesday's talks came after Juncker's European Commission had said the offers made by Greece last week were still not good enough to unlock the bailout funds.
"For this final push, the commission is of the view that the ball is clearly now in the court of the Greek government,'' commission spokesman Margaritis Schinas said.
Credit rating knocked down
With the onus firmly on Greece and options increasingly limited, Standard & Poor's in New York said the country most likely would default on its commercial debt within a year without a deal. It then downgraded Greece's credit rating one notch further into junk territory.
Finance ministers from the 19 nations using the euro currency will meet in Luxembourg next week with the Greek deadline for payment ever closer.
The lack of visible progress in the negotiations over the past weeks has revived fears Greece could default on its debts and drop out of the eurozone, a move that would create huge uncertainty for Europe and global markets.
"The goal is to keep Greece in the eurozone,'' Merkel said. "Where there is a will, there is a way.'' Yet she insisted it was up to Tsipras first and foremost to show that willingness.
Not only will Greece's bailout program expire at the end of the month, it will also have to repay about 1.6 billion euros ($1.8 billion) to the International Monetary Fund at that time.
"We must be quick. We must not let things drag out,'' Hollande said.
Athens is at odds with its creditors over what reforms Greece must make in return for the bailout loans. Each side has submitted its own proposals. But talks have been deadlocked since Athens rejected the creditors' suggestions as irrational last Friday, saying they would make life harder for Greeks already reeling from five years of deep spending cuts and soaring unemployment.
European Commission Vice President Vladis Dombrovskis stressed the importance of agreeing on overall targets for Greece's primary surplus — the budget surplus excluding debt and interest payments. Athens has been arguing for lower primary surpluses than creditors demand, saying that insisting on high primary surpluses curtails the amount of funds that can be spent on the country and causes unnecessary hardship.
Possible target
Minister of State Alekos Flambouraris, a close aide to Tsipras, told Alpha television that the primary surplus being demanded by lenders is now 1 percent, and that Greece wants 0.75. He said that Greece could settle at 0.85 and that it should be linked to further debt restructuring.
Tsipras' leftist Syriza party won elections in January on promises of repealing the harsh budget austerity measures that accompanied Greece's 240 billion-euro bailout program.
With the country facing a severe cash crunch, he has agreed to make some concessions, although he insists he will not cross certain "red lines,'' such as imposing further pension and salary cuts.
Tsipras must also face down hard-liners within his own party, many of whom have called for a break in relations with creditors and for Greece to go it alone, even if it means leaving the eurozone.