Merkel warns time is running out for Greece

Speaking to reporters at the end of the G7 summit in Bavaria on Monday, Chancellor Merkel stressed that while Germany wanted Greece to remain part of the eurozone, "there's not much time left. We have to work very hard on this."

US President Barack Obama also weighed in on the issue, speaking of a "sense of urgency" about the need for Greece's radical left-wing government to reach an agreement that will satisfy its creditors, the European Union and the International Monetary Fund (IMF).

"The Greeks are going to have to follow through and make some tough political choices that will be good for the long term," he said.

Obama added that this meant that Athens needed to get "serious about making some important reforms, not only to satisfy creditors but more importantly to create a platform whereby the Greek economy can start growing again and prosper."

Greek Prime Minister Alexis Tsipras and his finance minister, Yanis Varoufakis, have been wrangling with EU and IMF officials for weeks over their insistence that they agree on a package of reforms designed to shore up Greece's public finances, including increases to sales tax and cuts to the salaries and pensions of civil servants.

'Absurd,' 'borderline insulting' reform proposals

After the EU delivered its list of proposals last week, Tsipras described them as "absurd," while Varoufakis termed them "borderline insulting." Both are under intense pressure from parts of their Syriza party not to agree to a deal that would include any fresh austerity measures, after they were elected back in January on a platform of rolling back the austerity imposed by the previous government.

Athens needs to reach an agreement with its creditors to unlock the final 7.2 billion euros ($8 billion) of its bailout package, so that it can repay 1.6 billion euros owed to the IMF by June 30. Failure to get those funds released could trigger a "Grexit" - a scenario in which Greece would leave the eurozone.

Following a meeting with German Finance Minister Wolfgang Schäuble in Berlin on Monday, Varoufakis struck a more conciliatory tone than just a few days ago, describing their one-on-one talks as "productive" and "extremely friendly."

At the same time he warned that it would go down in history as "a failure of the political class of the European Union, me, Dr. Schäuble, Mrs. Merkel, Alexis Tsipras," if they failed to get a deal done by the deadline.

Tsipras is expected to discuss the issue with Merkel and French President Francois Hollande on the fringes of an EU-Latin America summit in Brussels on Wednesday.

pfd/cmk (AFP, Reuters, dpa)