Greece has 5 days to avoid default

Four months since Europe promised Greece more bailout loans in return for an acceptable program of economic reform, there is still no agreement. The eurogroup of finance ministers tried again Thursday, but the talks broke up with only a promise that Greece and its creditors would continue to try to close the gap between their positions over the next two days. "The [creditor] institutions informed us the distance with the Greek authorities on a number of issues is still far," said Jeroen Dijsselbloem, who chaired the meeting. "The eurogroup will probably reconvene on Saturday to take stock of the situation." Greece still appears unwilling to accept calls from Europe and the International Monetary Fund to spend less on pensions, raise more money from sales taxes, and scale back a planned tax increases on business. Greece also wants any deal to include ways to relieve the burden of its enormous debt -- even lower interest rates and longer repayment schedules. Related: Greece's brain drain will make recovery harder Earlier, officials reported some progress had been made between Athens and the IMF and Europe, but not enough to release the remaining 7.2 billion euros Greece desperately needs. "For the last few weeks the three [creditor] institutions have been working together," said IMF Managing Director Christine Lagarde. "We are coming up with a joint proposal, it has been focused and disciplined work and unfortunately the other side is not there yet, so still a lot of work to do." The stakes couldn't be higher. Without a deal, Greece won't be able to repay the IMF 1.5 billion euros due Tuesday. The IMF reiterated Thursday that the payment deadline would not be extended. If it misses the payment, Greece may have to introduce capital controls to prevent a run on its banks. It would then risk slipping out of the eurozone. German Chancellor Angela Merkel was reported to have told EU leaders that a deal must be struck this weekend. That would leave just two days for parliaments to ratify the agreement. Markets surged earlier this week on optimism that a deal could be brokered after Greece submitted new proposals to put its finances in order. But that plan has been put under the microscope, and run into objections from creditors. They're worried that the Greek proposals don't do enough to encourage growth, because they place too much emphasis on taxes, rather than cutting spending. That means the country could struggle to generate the budget surpluses it needs to service its enormous debts -- a key concern of the IMF. News Courtesy: