BRUSSELS -- Greece has made progress with creditors but "more time and effort" is needed to reach a deal so the cash-strapped country can get vital rescue money, the eurozone's top official said Monday.
Jeroen Dijsselbloem said after a meeting of the eurozone's 19 finance ministers that negotiations have "advanced" and that "important progress" is being made.
However, he said "more time is needed to bridge remaining gaps" to reach a comprehensive agreement.
"There are time constraints and liquidity constraints and hopefully we will reach an agreement before time runs out and before money runs out," said Dijsselbloem.
Greece is again facing a cash crunch that could see it go bankrupt within weeks and possibly leave the euro currency. It has to secure a deal on economic reforms and budget measures with creditors to get a bailout loan -- worth about $8 billion -- that will help it pay coming debts.
Earlier Monday, Greece confirmed that it has given the go-ahead for a big debt repayment worth $844 million to the International Monetary Fund due today. But it will have trouble meeting other big repayments in the following weeks.
Pierre Moscovici, the European Commission's top economy official, echoed Dijsselbloem, saying that there is a "new spirit" in the discussions.
"We are seeing some convergence on a certain number of subjects," he said. "But there are still major gaps to overcome before we reach an agreement."
In the event of a debt default, Greece could have to put controls on the flow of money through its banks and eventually even drop out of the euro altogether.
Despite three months of talks, Greece and its creditors have failed to agree on further reforms and savings Athens needs to qualify for the loan installment.
Greece hasn't taken bailout money since last August and has relied on its own resources.
Whether Greece will default on its debts and leave the euro is one of the biggest uncertainties surrounding the global economy. Markets in Europe were mixed Monday. France's CAC 40 was down 1.2 percent, while Germany's DAX shed 0.3 percent. Britain's FTSE 100 edged up 0.2 percent.
Greece's left-led government was elected in January on a mandate to end crippling austerity policies, blaming them for the precarious state of the economy. The budget cuts required in return for about $270 billion worth of rescue loans contributed to a contraction in the Greek economy and the skyrocketing of unemployment and poverty.
Business on 05/12/2015