Europe Economy

Greece defiant; accused of 'breaking all the rules'

Greek talks break down - what's next?
Greek talks break down - what's next?
Will Greece reach a deal with its creditors?
Will Greece reach a deal with its creditors?
Greek proposals 'unfair'?
Greek proposals 'unfair'?
Greece on brink of disaster: Former Greek PM
Greece on brink of disaster: Former Greek PM
Greeks want to stay in EU: Former Greek PM
Greeks want to stay in EU: Former Greek PM

As Greece remains defiant, despite talks with its international creditors stuck in deadlock, anger and concern is mounting in Europe about the finale to this Greek crisis.

Following an emergency meeting of the government on Monday -- ostensibly to discuss the failure of talks at the weekend -- Greek Prime Minister Alexis Tsipras blamed creditors for the deadlock, although this was swiftly rebuffed by Europe.

Michael Fuchs, vice chairman of Germany's CDU/CSU - the ruling conservative coalition, led by German Chancellor Angela Merkel -- told CNBC Tuesday that Greece needed to decide whether to stay in or get out of the euro zone.

"It's not a question of whether we are ready (for Greece to leave the euro zone), it's for Greece to decide what they want to do," he told CNBC Europe's "Squawk Box."

"If they are not coming up with any new reform proposals which we have agreed…and now they're breaking the contracts they have with us. They're breaking all the rules."

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Defending democracy

On Monday, Tsipras sounded a defiant note, saying that his government was not partaking in "ideological stubbornness," but was defending democracy. Signalling that Greece was in no hurry to concede ground on reform proposals, he added that the country would "wait patiently till the institutions adhere to realism."

Read MoreGreece on 'brink of disaster,' calls emergency meeting

Greek Finance Minister Yanis Varoufakis, meanwhile, stuck the boot in on Tuesday, saying he would not present any new proposals to lenders at a meeting of euro zone finance ministers later this week, according to an interview with German newspaper Bild.

Germany's Fuchs told CNBC Varoufakis' stance was incomprehensible.

"We want Greece to come up with proposals and it's fully not understandable that Varoufakis is saying this morning that he is not coming up with new proposals and yet he wants us to give him proposals," he said.

"We have made it very clear that first of all we need a primary surplus in Greece, but we want him to do something with the pensions, with the VAT (sales tax) and he has to make sure he's collecting the taxes."

Sticking points

Despite the bold rhetoric from Greek officials, the country does not have much time to spare – a 1.6-billion euro ($1.8 billion) debt repayment due to the International Monetary Fund (IMF) looms at the end of the month.

Indeed, Greek newspaper Kathimerini reported on Tuesday, citing sources, that Tsipras said the government would not pay the IMF at the end of June if it hadn't reached a deal with lenders. Meanwhile the Financial Times reported that senior un-named euro zone officials are considering a leaders' summit this weekend to discuss the deadlock.

Previous talks with creditors have met various stumbling blocks over pension, labor market and taxation reforms, and despite both sides proposing alternatives over recent weeks, the gap between Greece and its lenders' proposals has not been bridged.

Read MoreGreek talks in crisis after IMF leaves table

This has boosted fears that Greece could default on its debt repayments and a chain of events could be set in motion which sees it leaving the euro zone – a so-called "Grexit."

But Ian Bremmer, president of risk consultancy Eurasia Group, told CNBC that Greece's tactics of prolonging negotiations to get more flexibility over reforms was working.

"This tactic of the Greeks has been working. The Germans have come down on what they're expecting on the fiscal side, they've come down in terms of flexibility, in terms of how they get to a sustainable budget over time. The Germans don't want (a Grexit) on Merkel's sheet," Bremmer told CNBC Tuesdy.

"As a consequence, I think we are inching towards a deal, but no-one wants to actually say that until time truly has run out. And we're not there yet."

- By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt. Follow us on Twitter: @CNBCWorld