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Tension ahead of eurozone finance ministers talks

German establishment believes a Greek exit is much more manageable now than in 2012
German establishment believes a Greek exit is much more manageable now than in 2012

Tension is building ahead of a key meeting of eurozone finance ministers in Brussels tomorrow on how to avoid a Greek exit from the single currency.

Greece is still locked in negotiations with its EU-IMF creditors over a deal to release bailout funds in order to avoid a debt default.

Greece's new government has promised that people will not have to save anymore and it would make everything better and different. 

German impatience with Greece has intensified since Syriza came to power.

The breakdown in trust between the Greek and German finance ministers was almost immediate.

Adding to the hardening of attitudes is the fact that many in the German establishment believe a Greek exit is much more manageable now than in 2012.

In Greece, cabinet ministers speak of a "Merkel Moment" - an 11th hour deal where the chancellor will step in to show flexibility on the cuts and reforms the country's lenders are insisting on. 

But with Greece running out of money there are plenty of chances for it to default ahead of the summit of EU leaders at the end of June.

Earlier, a Greek junior minister said the country and its international creditors are "very close" to a loan deal.

Euclid Tsakalotos, a junior foreign minister, said Greece and its creditors were "politically apart" on labour and pension issues and that some areas "will remain open until the last minute".

However, European officials have played down the likelihood of a deal actually emerging at the meeting tomorrow.

Greece has been squeezing funds from the central and local governments to be able to meet its international loan payments, with concerns that within a matter of weeks it could default and face a messy exit from the euro.

But a loan repayment of €750m due on Tuesday to the IMF will be honoured, according to sources in Athens.

A poll in Real News daily on Sunday showed 71.9% of Greeks favoured a compromise to keep the country in the eurozone.

And if the question was put to a referendum, as the government has indicated it may do, 49.2% said they would accept further salary and pension cuts if it meant keeping the euro.