Talks between Greece and its international creditors disintegrated yesterday when Athens rejected a proposal to request a six-month extension of its international bailout as " totally unacceptable".
Despite a weekend of intensive talks between the troika and Greek officials in Athens the second eurogroup meeting in five days finished abruptly yesterday after Greece refused to countenance a draft communiqué proposed by the European Commission and the eurogroup of euro zone finance ministers.
Greek Finance Minister Yanis Varoufakis though looked to play down the situation as a temporary setback: "I have no doubt that within the next 48 hours Europe is going to come together and we shall find the phrasing that is necessary."
The two-page communiqué stipulated that Greece “request a six-month technical extension of the current programme as an intermediate step”.
Alexis Tsipras’s government has said it will not request an extension of the bailout, and is instead pressing for some form of “bridging programme” until a fresh arrangement with lenders can be negotiated.
"We have this week and that's about it," eurogroup president Jeroen Dijsselbloem said. "The general feeling is that the best way forward is for the Greek authorities to seek an extension of the programme."
He said a further emergency eurogroup meeting could be scheduled for Friday.
While all 28 EU finance ministers meet for a scheduled Ecofin council today in Brussels, tomorrow could be a crucial day for Greece because the European Central Bank is due to reassess its stance on the provision of emergency liquidity assistance (ELA). Last Thursday the ECB increased the amount of ELA allowed to Greece's banks by about €5 billion to €65 billion.
Dáil approval
Minister for Finance
Michael Noonan
said he favoured an extension of the programme though he noted that any new deal for Greece would have to be approved by the Dáil.
Mr Varoufakis reiterated his government’s opposition to an extension, instead pledging to “sit down with our partners with an open mind and rethink this programme from scratch”.
“This programme is part of the problem, not part of the solution,” he said. “It would be absolutely incongruous, an act of subterfuge to say that we are going to complete a programme we challenged the logic of.”
