The eurozone on Mondayy gave Greece an end-of-week ultimatum to accept a key condition in their talks on how to make the country’s debts sustainable after a meeting ended in acrimony.
The creditor nations in the eurozone said Greece must request an extension to its bailout programme something Athens has vowed not to do, as it wants to scrap the deal, which it views as harmful to its economy, in favour of a new one with easier terms.
The eurozone promised that if Greece accepts an extension to buy time and stave off financial uncertainty, it would offer an immediate renegotiation of the bailout’s terms.
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After a meeting of the eurozone’s 19 Finance Ministers was ended abruptly, Jeroen Dijsselbloem, who chairs the gatherings, relayed his “sense of disappointment” that the two sides had not bridged their differences over how to proceed with the new Greek government’s aspiration to ease its bailout terms. He said another meeting on Friday was possible if Athens makes the request.
“We simply need more time and the best way for that at this point is extend the current program which would allow a number of months us to work on future arrangements,” he said.
He said such a move could also help rebuild trust between Greece and the eurozone.
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The Greek government has steadfastly refused to consider an extension of the bailout and instead wants a “bridging program” to support its finances. Greece’s new government came to power last month on the promise to get rid of the current programme.
The eurozone creditors, however, say the current program should be extended to get more time to agree on a lasting solution.
“My strong preference is and still is to get an extension of the program, and I think it is still feasible,” he told a press conference.
Greece rejected what it says was an “irrational and unacceptable” demand from its euro partners. A Greek government official, who spoke only on condition of anonymity as they were not authorized to speak on the matter, said the proposals were a “radical departure” from what was previously discussed.
A draft statement from the meeting, which the Greek authorities rejected, envisioned Athens requesting a 6-month extension to its current bailout programme.
The Greek government blames the austerity measures the country has had to enact in return for its rescue money from the eurozone and International Monetary Fund for many of the country’s ills. Despite a modest return to growth in 2014, Greece’s economy is still a quarter smaller than in 2008, while unemployment and poverty rates have swelled dramatically.