European officials are preparing for the worst as Prime Minister Alexis Tsipras’s brinkmanship pushes Greece’s finances to the limit.

Chancellor Angela Merkel urged Tsipras to accept the framework for financial aid as the German public turns against supporting Greece and euro-area officials demanded a proposal for stabilizing the country’s debt by the end of Friday. The International Monetary Fund team left Brussels earlier this week, despairing of Tsipras’s tactics. Greek stocks fell.

“People are really fed up with this,” UniCredit SpA Chief Global Economist Erik Nielsen said in a television interview. “They’ve never seen anything so completely ridiculous, frankly speaking, from a debtor country.”

After four months going round in circles, diplomatic niceties evaporated in Brussels on Thursday as EU President Donald Tusk rebuked Tsipras for dragging his feet on a debt agreement. Greece has less than a week to accept the conditions for aid, with the euro area due to withdraw its financial safety net at the end of the month.

“Where there’s a will there’s a way, but the will has to come from all sides,” Merkel said in a speech to family-business leaders in Berlin. “That is why I think it’s right that we talk to each other again and again.”

Greek banks fell as much as 8.1 percent and traded 5.1 percent lower at 1:56 p.m. in Athens. Greek bank stocks have lost about 50 percent since the previous government of Antonis Samaras began to unravel in December. The Athens Stock Exchange Index, which has lost more than 20 percent since then, dropped 2.7 percent.

David Fuller's view

I assume that everyone with an ounce of goodwill towards Europe is fed-up with these tortuous negotiations, which however resolved, have created much more potentially lasting animosity than solidarity. 

Could this incident, the most recent and potentially important in the long line of the EU’s travails, have occurred if Europe had stayed with its original programme of a European Common Market? 

We may never know but I doubt it.  The only advantage of the Euro is transaction convenience but Southern and Northern European countries could have easily formed their separate currency alliances, had they wished to do so, without all the expensive bureaucracy that we see today.  The Euro’s remaining appeal is in the eyes of underdeveloped East European states which are trying to avoid absorption by Russia’s dictatorship. 

As for the UK’s referendum on whether or not to stay in the EU, scheduled for 2017 at the latest, the Grexit saga to date is unlikely to have improved sentiment towards the EU.  If you are interested in this subject, see also yesterday’s lead item.