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German Chancellor Angela Merkel says there's a 'whole lot left' to be done on Greece bailout

RIGA, Latvia – German Chancellor Angela Merkel on Friday added urgency to the talks between Athens and its international creditors, saying after a meeting with Greek counterpart Alexis Tsipras that “very, very intensive work is still needed.”

Merkel and French President Francois Hollande spoke for about two hours with Tsipras at a summit in Latvia as the three sought to pave the way for a deal to get Greece more loans.

The “friendly and constructive exchange” came after a leading official from Tsipras’ party warned that Greece will not be able to repay a loan to the International Monetary Fund on June 5 unless a deal is reached with its creditors to unblock bailout funds.

Tsipras said he was “optimistic that we can soon reach a stable long-term and sustainable solution, without the mistakes of the past.”

Merkel, however, said there is still “a whole lot left to be done” to reach a deal that might keep Greece solvent. A default by Greece would destabilize the country further, potentially causing it to fall out of the euro, creating huge uncertainties for Europe and the global economy.

Greece’s new government has been struggling for four months to agree on reforms that creditors require in return for the disbursement of the remaining 7.2 billion euros ($8 billion) of the country’s bailout program.

Locked out of the international bond market by prohibitively high interest rates, Greece relies on the bailout funds to service its debts and avoid default.

“Objectively, there are problems with liquidity and with the Greek economy,” government spokesman Gabriel Sakellaridis, told Antenna Television Friday. “So we believe that in the next 10 days, the conditions are ripe for this agreement to be reached.”

For Greece to get bailout loans in time to avoid a default on June 5, eurozone finance ministers and representatives of the European Central Bank and the IMF would all have to meet before that date to approve the details of an agreement.

Hollande said he met with Tsipras and Merkel this week to prepare for “the expected eurogroup meeting at the end of the month or early June.”

German officials said the three leaders could talk again if and when the talks hit a snag.

Adding to the struggles with its international creditors, Tsipras is also facing dissent within his own Syriza party, with some members saying that lenders are trying to force the government to abandon pre-election promises, and advocating the government make clear it intends to delay repayments.

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Derek Gatopoulos in Athens and Dave Rising in Berlin contributed to the story.