News of the deadlock — unexpected after a prediction last week of a "definitive decision" by the meeting's chairman, Luxembourg Prime Minister Jean-Claude Juncker — pushed the euro down 0.2 percent to $1.2802 as of 12:40 p.m. in Brussels. The Euro Stoxx 50 Index was little changed at 2511.69, while Greek bonds rose for a ninth day, the longest run of gains since the nation's debt was restructured in March. The yield on Greek 10- year notes fell 38 basis points to 16.72 percent.

Finance ministers failed to tackle the dual task of steering an extra 32.6 billion euros ($41.6 billion) to Greece through 2016 while finding a way to tame the resulting increase in Greek debt, already the highest in Europe and deemed "unsustainable" by the IMF.

"Further technical work on some elements of this package" is needed, Juncker said in a statement. He stopped short of predicting a deal at the next meeting, which will come after a European Union budget summit starting tomorrow that risks further inflaming tensions between the richer north and poorer south.

Funding Gap

Schaeuble told German lawmakers this morning that the issue of the Greek funding gap was solvable and possible solutions include reducing interest payments on its initial bailout loans, suspending payouts through 2020 on its second rescue package, or having the ECB buy 9 billion euros of the country's Treasury bills, according to four people who attended the briefing. Another option is for the EU's temporary bailout fund to finance the Greek government in buying back 10 billion euros of its bonds.

Greek Prime Minister Antonis Samaras said today that the country had done what its creditors had asked and that EU leaders must act quickly to shore up Greece.

"The future of our country and the stability of the euro area as a whole depends on the successful completion of this effort over the next few days," Samaras said, according to an e- mailed statement from his office.

A bloc of top-rated creditors led by Germany continues to resist debt forgiveness, telling their taxpayers that the Athens government will pay back in full the 240 billion euros in loans doled out or promised in two rescue packages since 2010.

German Chancellor Angela Merkel, gearing up to campaign for a third term next year, has ruled out writing off a portion of Greece's debt. Politicians in the Netherlands and Finland, also with AAA credit ratings, have told their bailout-weary voters the same thing.

Samaras's fragile coalition earned the concessions by passing another austerity budget, enacting reforms to make the economy more competitive and recommitting to a privatization program that had made little headway.

After three years of faulting Greece for failing to deliver on economic promises, the ministers commended the government's "considerable efforts." While the praise indicated that Greece qualifies for the release of a 31.5 billion-euro aid tranche on hold since June, the statement gave no timing for the disbursement.

With unemployment at 25.1 percent, Greece also enjoyed the sympathy of leaders including Merkel, the dominant figure in Europe's bailout politics, who has gone from threatening to kick the country out of the euro a year ago to praising its turnaround efforts.

Deficit Extension

The clash with the IMF was triggered by the ministers' decision last week to grant Greece two extra years, to 2016, to cut the deficit to 2 percent of gross domestic product. While designed to address Greece's growth problem, that gesture forced the country to take on extra debt to plug the higher deficits.

IMF bylaws bar it from lending to countries with "unsustainable" debts. In Greece's case, sustainability was defined as debt equal to 120 percent of GDP by 2020. New estimates put Greece's 2020 debt at 144 percent, potentially forcing the IMF to pull out.

"We made some good work and we're closing the gap but we're not quite there yet, so it's progress but we have to do a bit more," IMF Managing Director Christine Lagarde said.

European leaders are bracing for another showdown when heads of government meet at a summit in Brussels tomorrow to try to hash out an agreement on the EU's budget for 2014 to 2020. The U.K. is leading an effort to cut EU spending to reflect the budget tightening being carried out across the region, while other countries are seeking more EU funds to help the area overcome its economic slump.

EU President Herman van Rompuy will present a revised proposal at the start of a meeting, which is slated to begin at 8 p.m., an EU official said today.

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