BRUSSELS — Eurozone finance ministers failed Saturday to agree on reforms Greece has pledged in return for a new bailout, with talks due to resume the following day, as the window closes for Athens to reach a deal that could rescue the country from bankruptcy.
"We have adjourned our meeting and will continue tomorrow at 11am (4pm Thailand time)," Eurogroup chief Jeroen Dijsselbloem said early Sunday, following around nine hours of discussions that diplomats described as "very contentious."
Ahead of the meeting, several ministers had expressed scepticism that Greece would implement the promised reforms. Months of fraught bailout negotiations with Athens have severely eroded trust on both sides.
"The issue of credibility and trust was discussed, and also of course the financial issues involved," Dijsselboem later said. He said the talks are "still very difficult, but work is still in progress."
Sunday has been set as a final deadline, with eurozone and EU leaders due to meet in the afternoon in order to determine the future course for Greece. Fears have been revived that the country could be left to go bankrupt and crash out of the eurozone.
Greece's leaving the European currency bloc - a move popularly known as "Grexit" - had long been taboo, but a German newspaper reported that the option has officially been raised by German Finance Minister Wolfgang Schaeuble.
He has shared a position paper with other eurozone countries that deems Greece's reform plans inadequate and says the only options are for Athens to improve the proposals or exit the eurozone for at least five years, the Frankfurter Allgemeine Zeitung reported.
The proposal had been coordinated with German Chancellor Angela Merkel, sources told dpa on condition of anonymity.
Germany is sceptical that a "culture change" can be achieved in Greece on the need for broad reform, an EU diplomat said on condition of anonymity.
A total of more than 10 eurozone countries can be counted among the sceptics, while France and a few other nations are backing up Greece, the source said. There are 19 member states in the currency area.
The ministers will have just hours left to reach agreement on Sunday, with eurozone leaders due to meet from 4pm and the wider 28-member summit scheduled to start two hours later.
Greece's crisis has left heavily indebted Athens cut off from international aid and teetering on the edge of bankruptcy.
But it cannot regain access to European bailout funds until it agrees to economic reforms with its creditors.
Many ministers indicated Saturday that they can no longer take Greece at its word on the implementation of economic reforms.
"For five years, we have experienced such [reform] lists being transmitted, but the implementation of the measures never occurred," said Austrian Finance Minister Hans Joerg Schelling, noting that past Greek governments had failed to live up to their promises.
"Many governments, mine too, have serious concerns about the commitment of the Greek government," Dutch State Secretary Eric Wiebes added, noting that the same reforms now being proposed were rejected in a Greek referendum less than a week ago.
Several ministers pointed to the need for more substance in the Greek reform plans. There are concerns about the fact that Athens largely worked off reform proposals from previous bailout negotiations, even though the situation has since changed.
"The submitted proposal is like old, reheated soup, but without thickness," Latvian Finance Minister Janis Reirs told Latvian radio.
"On paper, it is not good enough yet," Dijsselbloem said ahead of the talks. "And even if it is good on paper, then we still have the question: will it really happen?"
But Greece desperately needs access to international aid. The country is estimated to have financing needs of 82 billion euros (US$91 billion) over the next three years, according to an EU source.
A bailout of 74 billion euros is currently being considered, which would leave Athens to make up the difference through a primary surplus, the source said. It would be the third rescue package provided to Greece in five years.
The inconclusive outcome of the ministers' meeting contrasted with the optimism that had prevailed ahead of the talks, after the Greek reform proposals won cautious backing from creditor institutions and an endorsement from the Greek parliament.
The proposals include the elimination of value-added tax discounts on Greek islands and VAT increases on restaurants, basic food, energy, hotels and water.
Greece also said it would eliminate a solidarity grant for hard-up pensioners more rapidly than previously proposed and introduce measures to keep people in work until the age of 67.
The proposals are closer to creditors' demands than previous offers, but disagreements remain, notably on debt relief and the role that the International Monetary Fund should play in the new bailout.