Greece was told that it has until Friday to request an extension to the current bailout or face the possibility of losing the pending funds after the second meeting of eurozone finance ministers in the last few days ended on Monday without an agreement between Athens and its partners.
Greek Finance Minister Yanis Varoufakis, however, said the government would continue talks over the next few days, regardless of any ultimatums from its partners. Varoufakis claimed that he had been shown the text of a communique earlier in the day by European Economic and Monetary Affairs Commissioner Pierre Moscovici which he was happy to sign but that this was later changed during the Eurogroup meeting for a document he could not accept.
Eurogroup President Jeroen Dijsselbloem said Athens had until Friday to request an extension, otherwise the bailout program would expire at the end of February. “Then, that’s it,” he said.
“The general feeling in the Eurogroup is still that the best way forward would be for the Greek authorities to seek an extension of the program,” he told a joint press conference with Moscovici and International Monetary Fund chief Christine Lagarde.
If a request for an extension is made, Greece can present alternative measures but not roll back previous reforms or take “unilateral steps,” Dijsselbloem said, noting that Greece’s demand for a “bridge” agreement was essentially “just another word” for an extension.
The Eurogroup chief underlined the need to “rebuild trust.” He suggested that a new program would not differ greatly from the previous one. “The rules and regulations talk about strict conditionalities. It would still be about fiscal sustainability,” he said.
Varoufakis insisted that he was prepared to sign the text he was shown by Moscovici “there and then” but was perplexed as to why this was changed for a communique not acceptable to the Greek delegation. Nevertheless, the Greek finance minister was confident that an agreement could be found soon, allowing for Greece to retain its loan agreement over the next four months in return for certain conditions. The SYRIZA-led coalition hopes this will give Greece and its lenders enough time to negotiate a more comprehensive deal that includes debt relief.
“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 so that we can submit it and move on to do the real work that is necessary,” he said.
Moscovici, however, stressed that there is “no alternative to the extension of the current program.” He called on the Greek government to request an extension, adding that there would be “flexibility over the short term.” “During the extension, we will have time to work on details,” he said. “We have to be logical, not ideological.”
Moscovici suggested that Greek authorities had not provided their interlocutors with details of their proposal in technical-level discussions, notably in relation to the 70 percent of the memorandum that Greece has indicated that it accepts and the 30 percent it has rejected.