Merkel, Hollande discuss programme extension, funding with Tsipras

BRUSSELS (Reuters) - The leaders of Germany and France discussed extending Greece's bailout programme and providing financing with Greek Prime Minister Alexis Tsipras on Friday on the eve of a decisive meeting of euro zone finance ministers, a French source said.

Chancellor Angela Merkel and President Francois Hollande had a private meeting with Tsipras before the final session of an EU summit in Brussels, urging Greece to accept a cash-for-reforms deal on Saturday to unlock frozen aid and avert a default.

"On the substance, the gap is not so wide. They discussed what has to be done today and tomorrow to conclude on issues still to be settled relating to reforms, the extension of the programme and the question of financing," the French source said after the roughly 45-minute meeting.

Both Merkel and Hollande stressed that Saturday's meeting of the Eurogroup was the decisive moment for a deal and there was no need for another euro zone leaders' summit, the source said. If necessary, they would have further contact with Tsipras before finance ministers meet at 5 p.m. (1500 GMT) on Saturday.

A Greek official said Tsipras told them he did not understand why the creditors wanted to impose such harsh conditions on Greeks.

(Reporting by Julien Ponthus; Writing by Paul Taylor; Editing by Alastair Macdonald)