Greece and creditors fail in 'last attempt' to reach deal

A European Union flag (L) and a Greek national flag flutter at the entrance of the Bank of Greece headquarters in Athens June 11, 2015.  [Photo/Agencies]

US-based economic analyst Jacob Funk Kirkegaard cast doubt on the Athens government's longevity. He said Europe seemed to be giving up on trying to coax Tsipras towards the political centre, opting for confrontation that might lead to "a new more realistic government".

"It is increasingly obvious he is not even a closet centrist but largely seems to agree with the left wing of his party. The euro area thus has no real choice but to seek regime change in Athens," he said on the website of the Peterson Institute for International Economics.

Tsipras still seems to have some support in his quest for debt relief. A person familiar with the negotiations told Reuters that discussions were under way on the issue.

Athens faces immediate problems in repaying debts as the EU and IMF have not paid any money from Greece's bailout programmes since the middle of last year. On top of the IMF loan, it must also repay 6.7 billion euros when Greek bonds held by the ECB fall due in July and August.

Even if this short-term hump can be overcome, Greece still faces the daunting prospect of eventually repaying the bailout loans, something that will hang over its enfeebled economy for decades unless a relief deal is achieved.