Eurozone governments left tough decisions on the future of Greece’s bailout for next week, after talks failed to bridge differences over the aid program that the Greek government blames for its economic hardship.
With Greece’s current bailout expiring at the end of this month, finance ministers met for six hours in Brussels without signing off on any conclusions on the way forward for the region’s most-indebted nation. That leaves open how Greece can avoid running out of cash and avert a possible exit from the 19-nation currency union.
EU leaders were to meet yesterday in Brussels, a day after German Chancellor Angela Merkel and French President Francois Hollande traveled to meet Russian President Vladimir Putin to negotiate a ceasefire in Ukraine. Merkel had left bargaining with Greece to the finance ministers.
Photo: Reuters
“We understand each other much, much better now than we did this morning,” Greek Minister of Finance Yanis Varoufakis told reporters after the meeting broke up without a deal early yesterday in Brussels. “Europe manages to find agreements even if it’s at the last moment.”
Greece needs its next bailout-loan installment of about 7 billion euros (US$7.9 billion) or some other financing to keep from defaulting on its international debt payments. The new, anti-austerity government of Greek Prime Minister Alexis Tsipras has said it no longer wants to abide by the terms of the bailout program, asking instead for bridge funding while negotiating a new deal.
Greek bonds slid yesterday, with the yield on three-year notes rising 6.6 basis points to 21.41 percent.
The euro fell as much as 0.3 percent to US$1.1303 after Dutch Minister of Finance Jeroen Dijsselbloem, who chairs the euro group’s talks, said ministers could not agree on a common approach. The euro briefly spiked to as high as US$1.1352 earlier, when officials suggested an accord on steps forward was within reach. It traded at US$1.1326 as of 9:02am in London.
“We covered a lot of ground, but didn’t actually reach a joint conclusion on how to take the next steps,” Dijsselbloem said at a press conference. “There has to be a political agreement on the way forward.”
Tsipras was to have have his first encounter with Merkel in Brussels yesterday, although no meeting is scheduled between the two leaders.
Finance ministers are to return to Brussels on Monday to try to break the deadlock after Greek negotiators were said to have wavered on a commitment to extending the country’s existing bailout from the European Commission, the European Central Bank and the IMF.
Tsipras’s campaign pledge to end the bailout — and its austerity mandates — hung over the talks. Agreed language on a bailout extension was within reach, only to be rejected later by Greek negotiators, who said they had to consult with superiors in Athens, German Ministry of Finance spokesman Martin Jaeger said.
Varoufakis did not comment to reporters on the snag.
Varoufakis said Greece wants to balance its existing bailout deal and its responsibility to voters after the anti-austerity SYRIZA alliance won elections last month.
He said Wednesday’s meeting was not designed to reach a final agreement and leaves room for more negotiations.
In Athens, thousands rallied in front of the Greek parliament on Wednesday in support of the government’s anti-austerity stance. Tsipras posted a photograph of the rally on Twitter, saying popular protests “across Greece and Europe” are “the source of our strength.”
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