Greece, euro zone fail to reach bailout deal

By: |
February 13, 2015 12:46 AM

Finance ministers to meet on Monday again to find a solution

Eurozone finance ministers failed to narrow their deep differences with Greece on Wednesday over how to keep the country from running out of money as it tries to revise the terms of its bailout.

After holding more than five hours of talks here with Yanis Varoufakis, the combative finance minister from the newly elected anti-austerity government in Athens, the ministers said they would need to meet again on Monday.

“We covered a lot of ground but didn’t actually reach a joint conclusion how to make the next steps,” Jeroen Dijsselbloem, the president of the Eurogroup of finance ministers, told reporters after the meeting. “There has to be a political agreement on the way forward” before concrete negotiations can get underway, he said.

The ministers were meeting in an emergency session to consider the leftist-led Greek government’s push for relief from tough austerity measures. Those restrictions were a condition of Greece’s being granted a total of 240 billion euros ($271 billion) in loans from its European neighbors and the International Monetary Fund since 2010.

Greece still needs to receive its next loan installment, 7.2 billion euros, or otherwise bridge the financial gap, to keep from defaulting on its international debt payments. But the new government of Prime Minister Alexis Tsipras has vowed to no longer abide by the terms of the bailout programme, which he and many other Greeks blame for the country’s economic woes and high unemployment.

The meeting in Brussels was called to give Varoufakis the opportunity to explain his plans to his eurozone counterparts all at once.

Characteristically casual in a tieless, untucked shirt, Varoufakis told reporters after the meeting that the experience had been a “fascinating” opportunity to discuss “all the facets of the Greek crisis.”

Another goal of the Wednesday night meeting was to prevent Greek tensions from spilling over into a summit meeting of European Union leaders scheduled for Thursday in Brussels, when the leaders are supposed to be addressing the Ukraine crisis and ways of responding to terrorism in Europe.

Ministers were hoping to get the situation with Greece into a holding pattern, so that work on the Greek proposals could get underway as soon as possible. If ministers did not quite reach that goal, they came close, according to diplomats who spoke on condition of anonymity.

Over the course of the evening, the ministers had been expected to release a joint statement in which the Greeks pledged to keep most of their previous commitments, and that laid out plans for technical discussions to continue on Friday and during the weekend. But that plan had to be dropped at the end of the meeting after ministers could not agree on additional language, demanded by Greece, on the gravity of social conditions in the country.

The goal was “to successfully conclude the plan” but “it’s not done,” Pierre Gramegna, the finance minister of Luxembourg, told reporters at the end of the meeting.

To reach that goal, analysts say both sides need to be willing to compromise.

“The solution for Greece is a matter of political willingness,” Guntram Wolff, the director of Bruegel, a research organization in Brussels, said earlier on Wednesday. “The first step is for the Greeks to stop their unilateral declarations to increase spending without being able to afford it,” Wolff said, and “then European creditors should somewhat delay debt repayments and offer them more of a financial cushion.”

As the ministers met in Brussels, thousands of demonstrators Wednesday night jammed into Syntagma Square and surrounding streets in Athens to support an end to austerity and back the government’s position.

Many brandished the Greek flag and waved placards reading, “Give Greece a chance!” while others denounced “European blackmail” and called for “no compromise with the bankers and the EU”.

Thousands also rallied in the large northern Greek city of Thessaloniki.

There also were rallies in support of the Greek administration in other European cities including Brussels and London.

Earlier in the day, Varoufakis met Christine Lagarde, the managing director of the International Monetary Fund, who came to Brussels in a black leather jacket that seemed to signal her readiness to take an approach as tough as Varoufakis’s.

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