Merkel says Greece long way from getting bailout deal

ANKARA 

German Chancellor Angela Merkel has said there is still intensive work needed before Greece can expect to reach a bailout agreement with its creditors.

Merkel made the remarks in the aftermath of her meeting Greek Prime Minister Alexis Tsipras late Thursday on the margins of a European Council summit with six Eastern European neighbor states held in the Latvian capital Riga.

Although the two talked for several hours, no clear result emerged.

“It is clear that work has to continue with the three institutions. There is still a great deal to be done,” Merkel was quoted by the local German media Friday.

Greece's institutional creditors are the European Commission, the European Central Bank and the International Monetary Fund.

The country is close to running out of funds to run its banks and public services. Credit rating agency Moody's said in a note on Wednesday that funds could run out as early as mid-June.

Moody's cited "the significant deterioration in banks' funding and liquidity since December 2014, with deposit outflows estimated at more than €30 billion ($33.3 billion), or 18 percent of total deposits, over the past five months."

Should Greece prove unable to pay its debts in June, "there is a high likelihood that capital controls and a deposit freeze will be imposed," Moody's said.

It’s now less than a week until Greece has to find money to pay pensions and public-sector wages. On June 5, Greece must pay €300 million ($334.5 million) to the International Monetary Fund (IMF).  In the same month, further payments to the IMF of €1.5 billion ($1.67 billion) must be made.

On Thursday, Spain’s Economy Minister Luis de Guindos told the press that a deal between Greece and its European creditors could come within a week. Greek Finance Minister Yanis Varoufakis said the same thing on Monday.

European Union Economic Affairs Commissioner Pierre Moscovici said Wednesday that an agreement in the next few weeks was "do-able," but that there were still big gaps on pension and labor market reforms.

While the Greek government has agreed to negotiate some aspects of pension reform, the main sticking point in the negotiations, labor market reforms, continues to daunt negotiators.