Greek Foreign Minister Yanis Varoufakis yesterday played down down the breakdown of talks with the country’s European creditors.
Varoufakis said that “we know in Europe how to deliberate in such a way as to create a very good solution, an honorable solution out of initial disagreement.”
His comments come a day after a meeting of the 19 finance ministers of the eurozone over how to make Greece’s debts sustainable broke down in seeming acrimony after barely more than three hours.
Photo: Reuters
European creditors issued Greece with an ultimatum, saying it must accept a key condition in bailout talks by Friday or face having to meet its debt commitments on its own. Many in the financial markets think that scenario would leave Greece little option but to leave the euro.
Greek shares led a European retreat yesterday as investors reacted negatively to the breakdown in talks. Greek shares opened more than 4 percent lower. Other markets fell, too, including Germany’s DAX, which was down 0.9 percent.
“Time is now quickly running out to reach a compromise agreement,” said Lee Hardman, an analyst at Bank of Tokyo-Mitsubishi UFJ. “It is becoming more likely that Greece will exit its current bailout program at the end of the month.”
Photo: Reuters
Investors are worried that the two sides are poles apart, especially as Greece’s new left-wing Syriza government made scrapping the bailout program a cornerstone of its election campaign.
“I hope that they will ask for an extension to the program and once they do that we can allow flexibility inside the program,” Dutch Minister of Finance Jeroen Dijsselbloem, who is also the top official in the eurozone, as he arrived for a meeting in Brussels of EU finance ministers yesterday.
“They can put in their political priorities,” Dijsselbloem said.
Without some sort of financing arrangements in place after the current bailout ends after Feb. 28, Greece would face trouble meeting its obligations, such as debt repayments, over the coming months.
“What the Greek finance minister has said gives us a positive feeling, though I must say that [their] opinions are changing pretty much every day and that actually is our problem,” Austrian Finance Minister Hans Joerg Schelling told Germany’s Deutschlandfunk radio.
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