BERLIN/ATHENS (Reuters) -International lenders failed for the second week to reacha deal to release emergency aid for Greece and will try again next Monday, but Germany signaled that major divisions remain.
Euro zone finance ministers, the International Monetary Fund and the European Central Bank were unable to agree in 12 hours of overnight talks in Brussels onhow to make the country's debt sustainable. They want a solution before paying the next urgently needed loan tranche to keep Greece afloat.
Several European officials played down the delay, saying the disagreements were technical and a deal would be reached when they meet again on November 26.
But German Finance MinisterWolfgang Schaeuble told lawmakers at a closed-door briefing in Berlin that the lenders were split over several key issues including how to define debt sustainability and fill a hole in Greek finances.
"He sees the extension of thedebt sustainability goal as one of the main bones of contention. The other is how to cover the Greek financing gap of 14 billion euros through 2014," said one lawmaker who attended Wednesday's meeting of Chancellor Angela Merkel 's centre-right Christian Democrats in parliament.
Merkel herself told the lawmakers the gap could be plugged by lowering interest rates on loans to Greece and increasing guarantees provided to the euro zone's temporary EFSF bailout fund, in which Germany would take its share, a participant said.
She suggested a deal could be struck as early as next week but rejected the notionthat big, bold actions could solve the debt crisis overnight.
"I believe there are chances,one doesn't know for sure, but there are chances to get a solution on Monday," Merkel told the Bundestag lower house of parliament during a debate.
Greece needs the next 31 billion euro aid tranche to keep servicing its debt and avoid bankruptcy. Its next major repayment is in mid-December.
Athens says it has carried outthe tough reforms required in the bailout program but needs more time to reach fiscal targets agreed with its lenders because its economyhas continued to shrink.
European governments wantto give Greece an extra two years, until 2022, to cut its debt to a sustainable level but the IMF does not agree. The Europeans, led by Germany, are refusing to write off any loans. Both options would make it easier for Greece to meet the targets in the bailout program.
French Finance Minister Pierre Moscovici said agreement was close, echoing overnight commentsfrom Eurogroup chairman Jean-Claude Juncker, who said talks were stuck on technicalities.
"We are a whisker away froma deal. I am very confident we will get there on Monday," Moscovici told Europe 1 radio.
Greece is increasingly frustrated about the repeated delays in releasing the aid and says it has done what is necessary.
"Greece did what it had committed it would do. Our partners, together with the IMF, also have to do what they have taken on to do," Prime Minister Antonis Samaras said in a statement.
"Any technical difficulties in finding a technical solution do not justify any negligenceor delays."
Samaras will meet Juncker inBrussels on Thursday and has cancelled a trip to Qatar next week to monitor the talks, a government spokesman said.
The prime minister is under growing pressure from his own coalition allies and the opposition after pushing through deeply unpopular austerity measures that he said were the only way to get more aid to avert bankruptcy.
"Τhe eurozone cannot use Greece as an alibi to justify itsweakness in dealing effectively and definitively with the crisis," said Evangelos Venizelos, head ofthe co-ruling PASOK party. Opposition leader Alexis Tsipras, whose party is rising in polls, said Samaras had lost all credibility.
Investors were disappointed with the news. Greek banking stocks fell nearly 6 percent in morning trade. Most of Greece's next aid instalment has been earmarked to shore up the country's tottering banks.
The euro, European shares and the prices of higher-yielding euro zone debt lost some ground but later recovered some of the losses.
