Greek Talks With Euro-Area Finance Ministers Break Up

Talks between the Greece and the rest of the euro area ended in acrimony on Monday as officials in Athens lashed out at demands that they stick to the previous government’s austerity program to retain financial support.
The Greek government said in an e-mailed statement it was “absurd” and “unacceptable” to ask the country to request an extension of the current rescue deal and accused Eurogroup Chairman Jeroen Dijsselbloem of backtracking on an agreement he made last week with Prime Minister Alexis Tsipras.
Negotiations lurched on briefly after the statement, before finance ministers called it a night.

“Time is really running out for Greece,” Maltese Finance Minister Edward Scicluna told reporters after the talks broke up. “That’s the main factor against it.”
Officials are trying to agree on a program of financial support to keep Greece afloat beyond the end of the month when its existing program expires. Without a deal, Greece could run out of money by the end of March, forcing Tsipras to consider abandoning his promises to the electorate or even leaving the single currency.

The European Union’s commissioner for economic and monetary affairs, Pierre Moscovici, had put forward a draft statement ahead of the meeting that Greece was ready to sign up to, Greek Finance Minister Yanis Varoufakis told reporters after the meeting. When finance ministers gathered Dijsselbloem put forward a different text that the Greeks could not accept.
“In the history of the European Union nothing good has ever come out of ultimatum,” Varoufakis told reporters after the meeting.

Break Down

The meeting of euro-area finance ministers was tense from the outset after weekend talks in Brussels failed to establish common ground. The 19-nation shared euro fell 0.4 percent to $1.1343 at 7:54 p.m. London time after the talks broke up, having climbed as much as 0.3 percent earlier on Monday.

“As talks collapse at the Eurogroup today, Greece finds itself now closer to a new bankruptcy within the Euro and potentially” leaving the currency union, Nicholas Economides, professor of economics at Stern Business School, New York University, said in an e-mail. “Greece could run out of money in March and the European Central Bank could suspend its assistance to Greek banks after Feb. 28, leading to their collapse.”
Dijsselbloem shut down the meeting when it became clear that talks were going nowhere, according to an EU official with knowledge of the talks. Afterward, the Dutch finance chief told reporters that ministers could reconvene on Friday -- but only if the Greeks file an extension request.
Ahead of the meeting, German Finance Minister Wolfgang Schaeuble said the Greeks haven’t shown enough willingness to soften their demands. He didn’t comment on the way out.

Schaeuble’s stance drew broad support, as ministers agreed Greece must ask for an extension of its existing program for talks to move forward. Even countries like France and Italy, which have been more sympathetic for Greek requests for bridge financing, said the Greek government must file a request to keep up its relationship with its creditors.
The Greeks said euro-area officials focused on the old aid memorandum “are wasting their time.” The statement continued: “With these facts, there can be no agreement today” and said the previous deal was “taken off the table” at meetings in Brussels last week.

‘Absurd’ Insistence

“The insistence of some circles that the new government enforce the memorandum is absurd and unacceptable,” the statement said.
Greece did not present any new data or numbers in between when finance chiefs gathered last week and Monday’s meeting in Brussels, Pierre Gramegna, Luxembourg’s finance minister, told reporters after the meeting.

A draft statement prepared for the euro-area finance ministers, dated Monday, said they would “make the best use of the existing built-in flexibility in the current program.” Part of the text was struck out with a hand-written line. It said: “The Greek authorities have indicated that they intend to successfully conclude the program, taking into account the new government’s plans.”
Greece has so far been promised 240 billion-euro ($274 billion) under two bailouts. Any deal might have set the stage for a follow-on aid program or credit line that would maintain oversight by the European Commission, the ECB and the International Monetary Fund.
“We have one way, a reasonable way, a way which takes into account the vote of the Greek people: it’s what we call a technical extension, with flexibility and the possibility to change some elements of the previous program,” French Finance Minister Michel Sapin said after the meeting. “It’s the only reasonable way forward.”