Greece's leftist government has put forward first proposals for pension reform as debt talks with international creditors reach a crunch point this week with Athens' cash running out, the European Union's economics chief said on Tuesday.
The report came after the leaders of Germany, France, the European Commission, the International Monetary Fund and the European Central Bank agreed at an emergency meeting in Berlin on Monday night to work with "real intensity" to try to wrap up the long-running negotiations in the coming days.
The surprise talks hosted by German Chancellor Angela Merkel showed that heads of state and international organisations have taken the battle to keep Greece in the euro zone into their own hands after months of insisting it was a matter for technical negotiations among experts.
Failure to reach agreement this month could trigger a Greek default and lead to the imposition of capital controls and a potential exit from the euro zone, dealing a blow to Europe's supposedly irreversible single currency.
Leftist Greek Prime Minister Alexis Tsipras held a separate marathon meeting with his negotiating team in Athens before they return to a crucial session of talks in Brussels on Tuesday.
A Greek government official said Athens would make a 300 million euro ($329.58 million) repayment to the IMF on Friday as due if there was an agreement with the creditors, hinting that it might otherwise withhold the money without saying so explicitly.
"If we judge that a deal has been sealed, then we will make the June 5 payment normally," the official said, adding that the money would be transferred if there was a preliminary agreement that was not yet approved by Eurogroup finance ministers.
EU Economy Commissioner Pierre Moscovici said in a radio interview the talks were making progress at last, citing what he said were new Greek proposals on pensions, a core issue for the creditors, who are demanding some cuts and a crackdown on early retirement to make the complex system financially sustainable.
"We are starting to work in depth on pensions. The Greek government has made some first proposals and the pros and cons are being considered," Moscovici told France Inter radio.
Greek officials played down talk of new pension proposals and EU officials close to the talks have said progress is very slow and they remain a long way from convergence.
"Greece has been flexible for a long time on pension reform, willing to scrap incentives for early retirement and proceed with merging pension funds. This is what is still on the table," a Greek government official said.
Moscovici deflected Greek demands for official debt relief, saying the issue of making Greek debt sustainable in the longer term would only be addressed once Athens had accepted a cash-for-reform deal to release some 7.2 billion euros in frozen aid.
That programme expires at the end of June unless there is an agreement.
In public, Greek ministers continued to be defiant. Tsipras accused the creditors in an article in Le Monde of making "absurd proposals" and disregarding Greek democracy.
Deputy Prime Minister Yannis Dragasakis said on his Twitter account that Greece's economy and society could not bear more austerity, and any deal must include a clear roadmap to debt sustainability.
"As a government we do not accept ultimatums, nor do we surrender to blackmail," he said, stressing that the leftist government would stick to its popular mandate.
Labour Minister Panos Skourletis said on Skai TV that Greece could not make any more concessions for a deal and it was up to the creditors to make concessions now.
A French presidency official hinted after Monday's talks that there were still differences among the lenders on the terms for a deal, after Greek officials said the IMF was toughest in demanding pension cuts and opposing any restoration of collective wage bargaining.
Other unresolved issues include legislation to ease mass layoffs in the private sector, and the size of the primary budget surplus Greece must achieve this year and next.
"(The leaders) agreed to work intensively to achieve a joint position of the institutions and to remain in close contact with Alexis Tsipras," the French official said, suggesting there were still gaps to be bridged among the creditors.
It was not clear whether the Berlin meeting sent any private message to Tsipras apart from the anodyne public statement issued by a German government spokesman, who said:
"They agreed that work must continue with real intensity. The participants in the talks were in close contact in recent days and want this to remain the case in the coming days both among themselves and of course with the Greek government."
A Greek government official said none of the five leaders had contacted Tsipras after the meeting.
Greece has received two EU/IMF bailouts totalling 240 billion euros since 2010, when it lost access to capital markets after admitting it had issued erroneous figures for years concealing the true scale of its budget deficit.