Merkel facing 'stark choice' on Greece

In a column to be published in Sunday's edition of the "Frankfurter Allgemeine" newspaper, Varoufakis wrote that the onus will be on Chancellor Angela Merkel, as the leader of Europe's biggest economy, to save Greece from going into default.

"On Monday, [when EU leaders gather for an emergency summit in Brussels], the German chancellor will face a stark choice," Varoufakis wrote.

"Enter into an honorable agreement with a government that opposed the 'bailouts' and which seeks a negotiated solution that ends the Greek crisis once and for all. Or ... heed the sirens from within the [German] federal government encouraging her to jettison the only Greek government that is principled and which can carry the Greek people along the path of genuine reform," he argued.

"The choice, I am very much afraid, is hers," he concluded.

At the same time Varoufakis raised the prospect of new concessions from Athens aimed at convincing its European Union and International Monetary Fund creditors that Greece's left-wing government is serious about combating its massive public debt.

'Determination to compromise'

"Our side will arrive in Brussels with the determination to compromise further as long as we are not asked to do what previous governments did: to accept new loan tranches under conditions that offer little hope that Greece can repay its debts," he wrote, without providing any detail about what concrete measures Prime Minister Alexis Tsipras' government was prepared to take.

After months of wrangling over what budget cuts or other economic reforms the left-wing Syriza government would be willing to implement in return for the release of the final 7.2-billion-euro ($8.1 billion) tranche of Greece's international bailout, there have been indications that patience among the country's eurozone partners is wearing thin.

On Friday, Merkel said at an event in Berlin that unless a compromise acceptable to Greece's creditors had been reached ahead of the emergency summit in Brussels, no decision could be taken on Monday.

There were reports that Tsipras may be planning to contact European Commission President Jean-Claude Juncker by telephone over the course of the weekend in an effort to break the deadlock. However, by late Saturday, it wasn't clear whether there had been any discussions or if any progress had been made.

Also speaking with the "Frankfurter Allgemeine," European Parliament President Martin Schulz warned the Greek government of the possible consequences of exiting the eurozone.

"What doesn't work: leaving the euro, not paying back your debts but expecting funds to keep flowing merrily from the EU budget," he said.

Greece is facing a June 30 deadline to meet a 1.6-billion-euro loan repayment to the International Monetary Fund. Should it fail to do so, as is expected to be the case if the bailout funds are not released, it would go into default, possibly triggering a scenario popularly dubbed a "Grexit." This would see Greece leave the eurozone and possibly even cease to be a member of the European Union.

pfd/cmk (AFP, Reuters, AP, faz.net)