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Sunday 22 October 2017

Greek talks collapse as deadline for bailout looms large for Europe

Greek Finance Minister Yanis Varoufakis in Brussels. Photo: Getty
Greek Finance Minister Yanis Varoufakis in Brussels. Photo: Getty
Dutch Finance Minister Jeroen Dijsselbloem speaking in Brussels yesterday. Photo: Getty
Colm Kelpie

Colm Kelpie

CRUNCH talks on Greece collapsed without agreement again last night after eurozone ministers struck a hard line on insisting the country extends its current bailout programme.

The country has now been given a deadline of just days to decide whether it will change its mind and request an extension of its €240bn bailout, which is due to conclude at the end of the month.

The unexpected conclusion to the talks last night has again raised questions about Greece's future in the single currency, with both sides maintaining entrenched positions.

The Greek government, led by far left party Syriza, swept to power last month after an election in which it promised to end austerity measures and to renegotiate the bailout deal.

It has repeatedly resisted calls for an extension of the bailout, instead preferring so-called bridging loans to avert a short-term cash crisis and to allow it time to potentially renegotiate the current deal on less onerous terms.

But talks between eurozone finance ministers aimed at finding a solution broke down, with Greece reportedly referring to a suggestion of a six-month extension as "absurd" and "unacceptable".

Jeroen Dijsselbloem, the chair of the so-called Eurogroup, made up of the 19 eurozone ministers, threw down the gauntlet to Athens, saying it was now up to Greece to make the next move.

He said he believed there was very little difference between an extension and a bridging loan.

"A request for an extension would have to be accompanied by a number of commitments," Mr Dijsselbloem said.

"A request should come with the commitment not to row back on any measures, unless agreed with the institutions and unless fully funded.

"A request should come with an unequivocal commitment from Greece to honour all of its financial obligations to its creditors and to ensure stability in the financial sector.

"It is up to the Greek authorities to decide whether they want such an extension... but also to give off the kind of commitments which I have just mentioned."

Mr Dijsselbloem suggested this week is the last opportunity for the Greek government to make such a request, and that ministers could reconvene on Friday if required.

The soundings in advance of yesterday's meeting were negative.

Finance Minister Michael Noonan struck a downbeat tone, saying there had been no breakthrough over the weekend, when officials from the IMF, European Commission and European Central Bank held talks in Athens.

He urged Greece's finance minister Yanis Varoufakis to present some specific proposals for ministers to consider.

Defiant

"Nothing happened over the weekend that would be described as a breakthrough and I think the ball is back in the Greek court again now with a request for them to explain to the rest of us exactly what they are looking for," he said.

It was a view shared by fellow ministers. German Finance minister Wolfgang Schauble remained defiant.

He said Greece had lived beyond its means for a long time and said there was no appetite in Europe for giving it any more money without guarantees.

"What I have heard so far has not strengthened my optimism," he said. But France hinted that some easing of the position should occur.

Mr Noonan said an extension of the programme was the most immediate way of making progress, and said it an extension was agreed, it would be put to the Dáil.

"If there was a new programme, it would have to go to parliament," he said.

"If there was an extension of the programme, I would feel obliged to go to the parliament and put it to the parliament, but the Government wouldn't require the sanction of the parliament."

The Greek minister Mr Varoufakis, in an article for the 'New York Times' yesterday, set out his refusal to allow his country to be treated as a "debt colony" subjected to "the greatest austerity for the most depressed economy".

Irish Independent

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