Germany softens tone ahead of crunch Greek debt talks

By Jan Strupczewski and George Georgiopoulos

European Union paymaster Germany softened its tone on Friday as euro zone finance ministers raced to break a deadlock over Athens' debts.

Hours ahead of the crunch talks in Brussels, a senior Greek official said a deal was close. Germany said Greece's latest proposal was a "good signal" although it did not go far enough in its present form.

The Greek official, speaking on condition of anonymity, said Athens had made a lot of concessions to reach an agreement and the euro zone should show some flexibility too.

"We have covered four fifths of the distance, they also need to cover one fifth," the official said, adding Greece wanted to clinch a deal on Friday, but that it would not back down in the face of pressure from the Eurogroup.

A spokeswoman for German Chancellor Angela Merkel said the latest Greek request for an extension of its loan agreement with Europe was a good signal and provided a basis for further talks, but was not sufficient in its current form.

Spokeswoman Christiane Wirtz however sent a more conciliatory message than Finance Minister Wolfgang Schaeuble had on Thursday, when he rejected the proposal from his Greek counterpart Yanis Varoufakis.

"The letter from the Greek finance minister makes clear that Greece remains interested in support from the European Union," Wirtz said. "This letter is a good signal which allows us to continue to negotiate."

She said the euro zone finance ministers' talks would "hopefully lead to an agreement with Greece."

Austerity

Germany and the new radical leftist-led government in Athens have squared off over demands that Greece stick to strict austerity conditions in its international bailout program.

The...