EU, Germany raise new alarm over Greece bailout

EU Commission chief Jean-Claude Juncker warned Friday of an alarming lack of progress in talks on Greece`s bailout, as Germany raised the spectre of a tumultuous Greek exit from the euro.

Brussels: EU Commission chief Jean-Claude Juncker warned Friday of an alarming lack of progress in talks on Greece`s bailout, as Germany raised the spectre of a tumultuous Greek exit from the euro.

Juncker was meeting Alexis Tsipras, the leader of the hard-left Syriza party who came to power in January, just days after Tsipras renewed a demand that powerful Germany repay debts from its Nazi past.

"I am not satisfied by the developments in the recent weeks," Juncker said before talks began with Greece`s 40-year-old premier.

"I don`t think we have made sufficient progress, but we will try to push in the direction of a succesful conclusion of the issues we have to deal with."

Greece won a four-month extension of its EU-ECB-IMF bailout in February -- despite Tsipras initially saying he wanted to abandon austerity and have a completely new arrangement -- but it will not get any of the cash until new reforms are approved by its eurozone partners.

But frustrations in the eurozone with the Greek government are mounting after Athens this week renewed the claim to Germany for World War II debts seen as outlandish by its partners.

Greece`s harshest critic German Finance Minister Wolfgang Schaeuble warned that with all the time wasted, a disorderly "Grexident" that could push Athens out of the euro could not be excluded.

"To the extent that Greece is solely responsible and decides what is to happen, and we don`t know exactly what Greek leaders are doing, we can`t exclude it," Schaeuble told Austrian broadcaster ORF.

A German finance ministry spokeswoman later rowed back on Schaeuble`s comments, stressing that "we do not want Greece to leave."

The usually more sympathetic Austrian Finance Minister Hans Joerg Schelling also warned of a possible "accident" and decried the inexperience of Greece`s new leaders.

Eurogroup head Jeroen Dijsselbloem -- the Dutch finance minister whose own relations with new Greek counterpart Yanis Varoufakis have been testy -- also criticised the attitude from Athens.

"In Greece, too much blame for Greece`s problems is laid outside Greece and Germany is now the preferred victim," Dijsselbloem told Dutch state broadcaster NOS.

"There`s a lot of verbal violence. This doesn`t serve any purpose."Juncker however insisted after his meeting with Tsipras that failure was not an option, and pleaded for a breakthrough.

"I am totally excluding a failure, I don`t want a failure. I would like Europeans to go together," the former Luxembourg premier said.

The two agreed that former Latvian premier Valdis Dombrovskis, the European Commission vice-president for the euro, would lead a "task force" that would deal with Greek officials for further talks.

But European officials behind-the-scenes warned that the dangers remained acute.

"Juncker told Tsipras he was very worried and could not exclude an `accident`," an official told AFP on condition of anonymity. "He urged Tsipras to multiply his efforts .. and avoid statements that could only divide."

Tsipras said he remained "optimistic" that a deal would be reached, but said his government was meeting its commitments.

"Greece has already started fulfilling its commitments to the eurozone so we are doing our part and we expect our partners to do their own," Tsipras said.

With Greece likely to seek a third bailout since 2010 later this year, Tsipras stressed the need for a longer-term solution.

"I want to be sincere to you that I have spent 90 percent of my time in order to discuss about the short-term deliberations with our partners in order to find a compromise," he said.

"But I think now it`s time to think about the future."

Athens faces an urgent cash crunch, having to find 6.0 billion euros ($6.4 billion) in the next two weeks alone to pay its creditors.

But Germany has held a hard line against the new government in Athens, which must first detail its reform plans before any release of more European cash.

After separate talks with Tsipras, European Parliament President Martin Schulz said Greece must get past the tensions with its partners.

"Prime Minister Tsipras is optimistic that the misunderstandings and confrontations could be solved and let`s be honest, it must be solved," he said.

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