Eurogroup again fails to reach agreement

That has forced the negotiations to stretch into the weekend.

The ECB must decide at regular intervals whether to continue to permit Greece banks to draw such emergency credit.

“The place of Greece is in the eurozone and we are working on that”, Moscovici added. “I was quite relaxed thinking a deal might get done and now you get this bombshell…”

He added that it was not the time to talk about any new debt restructuring or debt forgiveness for Greece.

Earlier on Thursday, Greek Prime Minister Alexis Tsipras expressed confidence that a compromise will be reached and Greece and the eurozone will be able to overcome the crisis.

She said the negotiating was a matter for the eurozone finance ministers and technical experts.

They include broad pension reductions, higher revenue from sales tax, and a faster elimination of tax exemptions – demands that are likely to fuel emerging dissent within the government if accepted.

“I consider that the meeting on Saturday is crucial because time is up on June 30, when the Greeks must meet their payment obligations, there are national parliaments that have to meet”, Hollande said.

Negotiations are now at a halt over which economic reforms Greece must make in order to secure additional bailout funds and avoid default. Creditors have said in the past they would consider that, by either lowering the interest rates or extending repayment dates on Greece’s bailout loans.

The official spoke on condition of anonymity, in line with department rules.

“The institutions are putting me and my government in an impossible position”, he said. But Greece, objecting to what it saw as outside interference, was still not on board, and wanted to stick to a previous plan it had offered.

He said there was a minority in Europe that wanted leaders to take a harder stance on Greece.

Varoufakis said Greece has done everything humanly possible to cave in to the “strange demands of creditors.” And while its commitment to the European Union is “absolute,” the country would not accept an unrealistic deal.

Many economists and observers suggest any deal this week will only provide short-term relief for Greece, which needs more financial support over the coming years, leading to speculation of a third bailout for the country in the future.

Some European Union members are ringing alarm bells – chief among them Germany and France, whose leaders say Saturday’s meeting of finance ministers is of the utmost importance to the Greek rescue effort.

The IMF’s negative reaction to the Greek proposals sent the Athens stock exchange down 3.1%, while the Stoxx 50 of top European shares fell 0.7%.

After marathon talks with creditors on Wednesday, Greek Prime Minister Alexis Tsipras was optimistic about reaching an agreement with his country’s creditors.

Greece will vote on July 5 on the outcome of negotiations with its worldwide creditors that have dragged on since January, when Tsipras’s Syriza party first took power on a promise of ending austerity.

The proposals put forward by Athens aim to raise €8bn, mostly through new taxes on the wealthy and businesses, early retirement restrictions, VAT increases and a cut in defence spending.