BRUSSELS: Greece rejected a proposal by its eurozone partners yesterday that it should accept a six-month extension of its international bailout programme while sticking to the terms of its agreement with lenders, casting talks on its debt into disarray.
EU officials said the talks were over unless Athens changed its mind after a leftist-led government won power last month and vowed to scrap the €240bn bailout, reverse austerity policies and end cooperation with EU/IMF inspectors.
A Greek official said Finance Minister Yanis Varoufakis had rebuffed a draft statement put to him at a eurozone finance ministers’ meeting in Brussels that spoke of Greece extending the current programme. “Some people’s insistence on the Greek government implementing the bailout is unreasonable and cannot be accepted,” the official said. “Those who keep returning to this issue are wasting their time. Under such circumstances, there cannot be a deal today.”
European Commission Vice-President Valdis Dombrovskis told reporters after the talks broke up after less than four hours that eurozone partners were willing to resume talks with Greece if and when it changed its position. “It was clearly decided that if and once this request for an extension of the bailout is there, if there are certain commitments from the Greek authorities to stick to the programme, then the chairman of the Eurogroup will announce the next Eurogroup,” Dombrovskis said.
German Finance Minister Wolfgang Schaeuble said before the talks that Greece had lived beyond its means for a long time and there was no appetite in Europe for giving it any more money without guarantees it was getting its finances in order.
Failure to reach a deal would raise fears that Greece could be forced out of the eurozone. The European Central Bank is due to review tomorrow how much longer it is prepared to allow the Greek central bank to continue providing emergency funds to keep Greek banks afloat.
As the meeting in Brussels broke up, a senior Greek banker said Greece’s stance boded ill for the markets and the banks.
“It is a very negative development for the economy and the banks. The outflows will continue. We are losing €400-500m every day and that means about €2bn every week. We will have pressure on stocks and bond yields tomorrow.” Reuters
