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19th Jan 2020

Greece continues to refuse bailout extension

  • The ball is in the Greeks' court, says Eurogroup chief Dijsselbloem (Photo: Council of European Union)

A meeting of eurozone finance ministers ended early on Monday (16 February), with Greece refusing to sign off to a six-month bailout extension, in what appears to be a clash both on semantics and conditions.

Eurogroup chief Jeroen Dijsselbloem, who chaired the meeting, said there had been a "slight sense of disappointment" in the room as no agreement could be reached.

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He spoke of a "general feeling" and the "preferred option" that the only solution was for Greece to ask for an extension of its bailout programme which ends on 28 February.

Within this extension - six-months, according to the draft prepared by Dijsselbloem's services - Greece would have enough time to negotiate the way forward with its creditors and would also have enough "flexibility" on the reforms it needs to implement, provided it sticks to the commitments attached to it.

Dijsselbloem said he "didn't really mind" if the extension was called a "bridging programme" - a term used by Athens - so long as there was a common understanding of what the conditions are.

"I wish it was just a debate about words. The reason why we still talk about an extension is that in the rules and regulations of the [bailout funds] EFSF and ESM, this is how it's called. But it is also a bridge arrangement for the next six months," Dijsselbloem said.

He said there was only time until end of this week, given that several national parliaments need to approve an extension before the current programme runs out.

For his part, EU economics commissioner Pierre Moscovici, who earlier in the day presented a separate paper the Greek government was willing to sign up to, said there had been a lot of talk about "phraseology."

"But we absolutely need a request for an extension. If there is a request, then there is a possibility to examine flexibility and we can discuss substance. But so far, we were not able to do so," he said during the same press conference.

"We need to be logical, not ideological," Moscovici added.

Dijsselbloem downplayed the difference between the Moscovici paper and his, which was tougher and only promised to "make the best use of the existing built-in flexibility."

"There have been many drafts and talks - sometimes only in words, sometimes in writing, some proposals came from the commission, others from my own services, others from Greece. But we didn't find an agreement on any text at this point," Dijsselbloem said.

For his part, Greek finance minister Yanis Varoufakis said he would have been ready to sign "there and then" the Moscovici statement, which would have promised an extension of the "loans programme" and that in return, as a sign of good will, Greece would have refrained from any unilateral measures that would have jeopardised the budgetary targets set under the programme.

But Varoufakis said the commission's paper was then replaced by the Dijsselbloem paper which he could not accept.

"In the history of the European Union, nothing good has ever come out of an ultimatum," Varoufakis noted.

He did not exclude making that request in the coming days.

"I have no doubt that in the next 48 hours Europe will come together and find the phrasing needed to establish common ground," he said.

Another Eurogroup may be called on Friday, if the Greeks request it. A special summit of eurozone leaders is excluded at this point, Dijsselbloem said, after having consulting with EU council chief Donald Tusk.

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Greece caves in, Germany plays hardball

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