Greek drama takes another turn with abrupt end to euro meeting

The ongoing Greek drama took another turn yesterday evening when a scheduled euro group meeting of euro zone finance ministers ended abruptly without agreement between Greek finance minister Alexis Tsipras and his 18 euro zone counterparts. The meeting, which was also attended by IMF managing director Christine Lagarde and ECB president Mario Draghi, had been billed as a "crunch meeting", but instead concluded in much the same fashion as last Wednesday's emergency euro group, with Greece refusing to sign up to a proposed communiqué.

Officials who were in the room pointed out that a full discussion of the document did not even occur - Greek officials had indicated it would not support the document ahead of the meeting. The two-page communiqué had been drawn up by Commission officials on Sunday, and revised by euro group partners, including Germany, before the meeting. It included the contentious stipulation that Greece would "request a 6 months technical extension of the current programme as an intermediate step."

Almost as soon as the meeting ended, the blame game began. Euro group president Jeroen Dijsselbloem said it was now up to Greece to take the next step. "The decision now has to come from the Greek government," he said, pointing out that while both sides were using "different words" in their discussion of a programme extension versus a bridging programme they could be striving for "very much the same solution." Euro group officials repeated the sentiment. "What we're waiting for now is a letter from Greece," one senior source said.

Greek finance minister Yanis Varoufakis was both defiant and articulate following the meeting. He told journalists that Greece had been prepared to sign up to the original communiqué drafted by the European Commission on Sunday, but the version amended by the euro group just before the meeting had included a "nebulous promise of flexibility" that was never specified. "We're asking for a phrase that offers both sides an honourable means to commence the search for common ground," he said, adding that Greece wanted to sit down with its partners and "rethink this programme from scratch." "This programme has failed to stabilise Greece, has generated a major humanitarian crisis, " Mr Varoufakis said, adding that a "spirit of collegiality" was essential. "In the history of the European Union nothing good has ever come out of ultimatum," he said.

The fact that the second euro group meeting in five days has ended without agreement is a worrying development, particularly as it follows intensive - and it now seems fruitless - talks between Greek officials and representatives of the IMF, European Commission and European Central Bank in Athens on Friday and Saturday.

While the euro group has provisionally pencilled in an emergency meeting on Friday, tomorrow’s ECB meeting could be crucial, when the bank reassesses its sanctioning of emergency liquidity assistance to Greece’s banks. Mr Dijsselbloem said yesterday that no discussion of capital controls had taken place during yesterday’s euro group, but with deposit outflows from Greek banks estimated to be topping €2 billion a week, the funding situation of the Greek banks is of critical concern.

ESM head Klaus Regling also specified what kind of money was at risk if the Greek bailout is abandoned, pointing out that €1.8 billion in EFSF money, a linked €1.9 billion from the Securities and Markets Programme (SMP) and €10.9 billion in EFSF bonds and buffers were potentially at stake.

With the Greek bailout due to expire in less than two weeks’ time, Mr Dijsselbloem’s statement that “we simply need more time”, seemed to be one of the few examples of common ground between the parties in what is becoming an increasingly acrimonious standoff.