Greece pushed on debt deal concessions, amid austerity protest in Athens

Greek Prime Minister Alexis Tsipras was under intense pressure from European creditors Thursday to deliver concessions that would clinch a deal to avoid a damaging default on loans and steer the country away from a eurozone exit.

Hopes of progress in the longstanding bailout talks grew after German Chancellor Angela Merkel said Athens had committed to resolve the four-month long impasse in coming days after late-night talks with Greece and France. A subsequent meeting between Tsipras and European Commission President Jean-Claude Juncker took place, but ended Thursday afternoon with no immediate sign that the pair had managed to bridge remaining gaps on a cash-for-reform deal.

The International Monetary Fund, one of Greece's creditors, said there had been "no progress" and that an agreement was still far off. Juncker gave a rosier assessment, describing the meeting as friendly, interesting and important.

As Greece’s government attempt to forge a deal to satisfy creditors, it also faces pressure at home from those disappointed at what they see as a climb-down from the left-wing administration over the international bailout. Protesters in Athens staged a sit-in at the finance ministry on Thursday, accusing Tsipras and his Syriza government of planning new austerity measures — counter to their election campaign pledges earlier this year.

“We have bled enough, we have paid enough,” ran a banner over the façade of the building, placed their by Communist Party-affiliated activists.

But markets viewed Wednesday’s diplomatic developments more favorably.

After Tsipras’s meeting with Greece and France meeting, stocks rallied, particularly in Greece, on optimism that a deal, which has remained elusive for four months, could be reached in time for next week's meeting of Eurozone finance ministers.

The European creditors have made clear that Greece must improve an offer of reforms it would introduce in exchange for $8.1 billion in bailout loans it needs to repay debts due at the end of the month.

Merkel said that in the overnight talks with Tsipras a clear consensus emerged that "Greece will now work emphatically and at full steam with the three institutions in coming days to try to clear up all the outstanding issues."

Merkel expressed "hope that the necessary progress can now be made," and underlined that "each day counts."

"You have to get the cow off the ice, where it keeps on slipping. We are trying to push it off again now," Juncker said ahead of his meeting with Tsipras on Thursday.

"We decided to intensify the effort to bridge the remaining differences," Tsipras said after his talks with Merkel, Juncker and French President Francois Hollande.

The lack of progress in the negotiations over the past weeks has revived fears Greece could default on its debts and drop out of the eurozone, a move that would create huge uncertainty for Europe and global markets.

The head of Germany's central bank, Jens Weidmann, said time is running out for a deal, and the risk of insolvency is increasing by the day.

"The contagion effects of such a scenario are certainly better contained than they were in the past, though they should not be underestimated," he said in a speech in London. "But the main losers in that scenario would be Greece and the Greek people."

Amid the uncertainty, Greece's economy has slipped back into recession, while figures released Thursday showed that unemployment grew again in the first quarter, reaching 26.6 percent, the highest in the eurozone.

A deputy health minister, Andreas Xanthos, warned that Greece's under-staffed, under-funded public health system faces "very serious problems" at the end of the year unless a bailout deal can be struck soon.

Finance ministers from the 19 nations using the euro will meet in Luxembourg next Thursday, less than two weeks before Greece's bailout program expires and it has a big debt repayment due.

Al Jazeera and wire services