Hopes low over Greece bailout as officials prepare to meet

A Greek Orthodox priest holding a national flag walks in front of a Presidential guard during an anti-austerity rally in front of the parliament in Athens

Optimism was in short supply over the prospects of a deal yesterday that might prevent Greece’s bankruptcy, as officials gathered for a keenly awaited eurozone finance meeting.
With Greece fast approaching a potential default on June 30 and amid signs that Greeks are withdrawing money from their banks, officials acknowledged that a Greek exit — or Grexit — from the euro was now being discussed.
Pierre Moscovici, the European Union’s top economy official, said the eurozone meeting will be “very difficult” but that he hoped everyone turns up “with cool heads and the political will to succeed.”
Reiterating that the EU’s executive arm will do what it can to get a deal, he acknowledged that talk of a Greek exit from the euro was being discussed by some.
“The stakes are extremely high for the Greek people and all of Europe,” he said in Luxembourg.
Greece’s radical left-led Greek government has been locked in discussions with its international creditors since its election in January over what economic reforms and budget cuts it needs to make to get the remaining 7.2 billion euros (USD8.2 billion) available in its bailout fund.
It needs that money to pay upcoming debts — first and foremost 1.6 billion euros due to the International Monetary Fund at the end of the month.
While Europe’s finance ministers were preparing for their discussions, Greek Prime Minister Alexis Tsipras was traveling to Russia to meet President Vladimir Putin — a visit that has prompted speculation Greece could be seeking Russian loans.
Asked whether Russia is going to offer Tsipras money, Russian Deputy Prime Minister Arkady Dvorkovich said he “cannot comment on specific decisions.”
The blame game over the impasse in Greece’s talks has gotten louder in recent days, with both sides claiming they’ve gone a long way to secure a deal. Tsipras has been adamant he won’t back any deal that cuts pensions while European officials say they’ve made compromises to meet the Greek government’s demands. For example, they dropped a budget surplus target from 3 percent of GDP to 1 percent this year.
The stalemate has become an increasing concern across financial markets as investors fret about the potential implications of a Greek default and exit from the euro. The Bank of Greece warned its own government on Wednesday to get a deal done quickly, or Greece would face an “uncontrollable crisis” that might jeopardize the country’s membership in the European Union. Lorne Cook and Pan Pylas, Luxembourg , AP