Greece flip-flops on troika talks

"I've never said that we are not interested in discussing with our creditors, exactly the opposite, we are very keen to enter into fruitful negotiations and deliberations with the ECB, the IMF, the European Commission and every single member state of the eurozone to which we belong and rightfully find ourselves in," Varoufakis said.

He said it might have been a translation problem, that he only meant the second tier of the troika - the "very good people" who come to Greece to oversee the implementation of the programme that "has utterly failed over the last five years."

"We want a few short weeks to put together a new programme, a new deal for Greece with our creditors," Varoufakis said.

He called into question the entire logic of the bailout, comparing Greece with a family who loses its income and draws from a credit card to pay for its mortgage.

Asked whether or not Greece will draw the last, €7bn, tranche from the bailout programme, he insisted that what the new Greek government is interested in is a deal on the "real problem" - the insolvency of Greece, rather than piling on new debt.

Greece was given a bailout extension of two months last December when the previous government led by the conservative PM Antonis Samaras failed to deliver on privatisations and further structural reforms required by the troika.

Since the left-wing Syriza party came to power earlier this week, it has halted privatisations and promised to restore labour rights and undo some of the measures implemented under the bailout programme. This has worried the markets and seen capital flight (by one account €20bn has left the country since early December) from Greece.

Varoufakis said he is in principle in favour of privatisation and attracting foreign investors, but criticised what was done under the bailout programme as being a "fire sale in the middle of a deflationary process".

"We are not at all against structural reforms, we want to deepen them, make them more extensive - Greece has not been reforming over the last 5 years, it has been deforming," Varoufakis said.

Cancelling half of Greece's debt is the core demand of Syriza and the new prime minister, Alexis Tsipras.

But EU politicians - including Dijsselbloem on Friday - have warned that Greece needs to stick to its commitments and that while some debt repayments can be delayed and made with lower interest rates, the idea of debt forgiveness is unacceptable.

"Taking unilateral steps and ignoring previous arrangements is not the way forward," Dijsselblloem said during a press conference where his body language suggested he had been through very tense talks with Varoufakis.

Dijsselbloem rejected Syriza's idea of convening a European conference on debt. "This conference already exists and it's called the Eurogroup," he told the press conference.

He added that Greece and the troika will have to decide what will happen next before the bailout extension ends, on 28 February.

French mediation

Meanwhile, in Strasbourg, French President Francois Hollande met with German Chancellor Angela Merkel for an informal dinner together with the head of the EU Parliament, Martin Schulz, who earlier in the week went to Greece to meet Tsipras.

Greece was not the only topic at the three-hour dinner, but it did come up, with Hollande seeking to find a "method" and "options" for establishing a dialogue with Tsipras, Le Figaro reports.

Tsipras will visit Paris next Wednesday, while Varoufakis is expected to meet his French counterpart on Monday. The EU commission chief, Jean-Claude Juncker, is also expected to meet Tsipras in Brussels next week.