RIGA, Latvia — German Chancellor Angela Merkel said after talks with her Greek counterpart Alexis Tsipras that there is still “a whole lot left to be done” to avoid a financial meltdown in Athens.
Merkel and French President Francois Hollande spoke for some two hours with Tsipras at the Eastern Partnership summit and the German leader said May 22 that “very, very intensive work is still needed.”
The three met to pave the way for a special Eurozone meeting of finance ministers late this month or early June.
The meeting came a day after a leading official from Tsipras’ party said that Greece will not be able to repay a loan to the International Monetary Fund early next month unless a deal is reached with its creditors to unblock bailout funds.
new government has been struggling for four months to agree on reforms that creditors require in return for the disbursement of the remaining 7.2 billion euros ($8 billion) of the country’s bailout program.
Locked out of the international bond market by prohibitively high interest rates, Greece relies on the bailout funds to service its debts and avoid default.
There had been rumors there would be an extraordinary meeting of Eurozone finance ministers to keep Greece from financial collapse, but Hollande said the leaders were meeting to prepare for “the expected Eurogroup meeting at the end of the month or early June.”
Adding to the struggles with its international creditors, Tsipras is also facing dissent within his own SYRIZA party, with some members saying that lenders are trying to force the government to abandon pre-election promises, and advocating the government make clear it intends to delay repayments.
“With Mr. Tsipras we want to find solutions that will allow for a boost of confidence and to free the funds that were foreseen,” Hollande said.
He insisted it would not turn into a negotiating session, saying that would be left to the 19 eurozone finance ministers.
In recent weeks, Greece has managed to repay debts by scraping together money from state enterprises’ reserve funds, including schools, cultural centers and embassies abroad.
But those funds will not be enough to tide the country over through the summer, when it faces repayments of several billion euros.
Early this week, Finance Minister Yanis Varoufakis said a deal could be reached with lenders within a week, but European officials have said progress remains slow.