Tsipras hardens Greek stance after collapse of bailout talks

[ATHENS] Greece and its creditors swapped recriminations over who was to blame for the breakdown of bailout talks, as each side hardened its position after a last- gasp attempt to bridge differences collapsed in acrimony.

With markets plunging in Asia and in Europe, Prime Minister Alexis Tsipras portrayed Greece as the torchbearer of democracy faced with unrealistic demands, while the caucus leader of Chancellor Angela Merkel's parliamentary bloc said Greeks had to "finally reconcile themselves with reality."

"One can only read political motives in the creditors' insistence on new cuts to pensions after five years of plundering them under the memorandum," Mr Tsipras was cited as saying in a statement in Efimerida Ton Syntakton newspaper on Monday. "We will wait patiently for the institutions to move toward realism."

The euro dropped in early trading after the European Commission said negotiations in Brussels had broken up on Sunday after just 45 minutes with the divide between what creditors asked of Greece and what its government was prepared to do unbridged. The focus now shifts to a June 18 meeting in Luxembourg of euro-area finance ministers that may become a make-or-break session deciding Greece's ability to avert default and its continued membership in the 19-nation euro area.

"In the end, this is not the kind of situation where you can have a mechanical agreement for some kind of numbers, where you meet in the middle or something similar," Valdis Dombrovskis, European Commission vice president for euro policy, said on Latvian television Monday. "To reach an agreement Greece has to do the work that is necessary."

The Stoxx Europe 600 Index fell 0.8 per cent as of 9:16 am in Berlin, while the euro weakened 0.3 per cent.

The latest failed attempt to find a formula to unlock as much as 7.2 billion euros in aid for the anti- austerity Syriza-led government brings Greece closer to the abyss. With two weeks until its euro-area bailout expires and no future financing arrangement in place, creditors had set June 14 as a deadline to allow enough time for national parliaments to approve an accord.

"If some interpret the government's honest willingness to reach compromise and the steps it has taken to bridge the differences as weakness, they should consider this: we don't just carry a heavy history of struggles," said Mr Tsipras.

"We're carrying on our backs the dignity of a people, but also the hopes of the people of Europe. It's too heavy a burden to ignore. It's not a question of ideological stubbornness. It's a question of democracy."

BLOOMBERG