File Photo: International Monetary Fund
An agreement on Greece will require "difficult decisions by all sides," the International Monetary Fund (IMF) said, after last-ditch talks between cash-strapped Athens and its EU-IMF creditors ended with no deal on Sunday.
IMF chief economist Olivier Blanchard made the comments in an official blog, saying that there were "tough choices and tough commitments to be made on both sides," amid growing fears that the Greek government is heading into the financial abyss.
Greek officials said the failure to strike a deal in Brussels was the fault of the International Monetary Fund, the country's firmest creditor, as Athens edges closer to the Eurozone exit door.
"At the core of the negotiations is a simple question: How much of an adjustment has to be made by Greece, how much has to be made by its official creditors?" Dr Blanchard wrote.
"Greek citizens, through a democratic process, have indicated that there were some reforms they do not want," he added, alluding to the anti-austerity far-left Syriza party that swept to power in January in a snap election.
"We believe that these reforms are needed, and that, absent these reforms, Greece will not be able to sustain steady growth, and the burden of debt will become even higher.
"Here again, there is a trade off: To the extent that the pace of reform is slower, creditors will have to provide more debt relief. Here again, there is a clear limit to what they are willing to do."
According to an EU source at the last-minute talks, savings from reform measures put on the table by Greece fell short by two billion euros.
The Greek proposal "remains incomplete", the EU source said, and was not enough to unlock the 7.2 billion euros ($8.1 billion) still remaining in Greece's international bailout, which expires on June 30.
All eyes will now be on the financial markets today with the feeling now stronger than ever that Greece could be finally heading for an exit from the euro after five years of crisis.