BRUSSELS — Greek Finance Minister Yanis Varoufakis is playing down the breakdown of talks with the country’s European creditors.
Varoufakis said Feb. 17 that “we know in Europe how to deliberate in such a way as to create a very good solution, an honorable solution out of initial disagreement.”
His comments come a day after a meeting of the 19 finance ministers of the Eurozone over how to make Greece’s debts sustainable broke down in seeming-acrimony after barely more than three hours.
European creditors issued Greece with an ultimatum, saying it must accept a key condition in bailout talks by Feb. 20 or face having to meet its debt commitments on its own.
Many in the financial markets think that scenario would leave Greece little option but to leave the euro.
Varoufakis said he would keep on talking despite the line in the sand drawn by the Eurozone. Prime Minister and Radical Left SYRIZA leader Alexis Tsipras and Varoufakis were staking their bets on the belief that it would be the Eurozone, fearing a ripple effect in the other 18 countries, that would blink, back down and give Greece debt relief but it hasn’t happened so far.
Varoufakis said he had initially been given the text of a possible deal from European Economic and Monetary Affairs Commissioner Pierre Moscovici that Greece would have accepted but that the terms were changed so he would not.
Eurogroup President Jeroen Dijsselbloem said if Athens doesn’t accept an extension to what’s left of 240 billion euros ($272 billion) in two bailouts from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that Greece would b on its own. “Then, that’s it,” he said.
“The general feeling in the Eurogroup is still that the best way forward would be for the Greek authorities to seek an extension of the program,” he told a joint press conference with Moscovici and International Monetary Fund chief Christine Lagarde.
Tsipras – who said he wouldn’t talk to the Troika nor recognize its authority but now has – also said he would not accept an extension although Varoufakis proposed a “bridge agreement” which technically is the same but using a different term.
If a request for an extension is made, Greece can present alternative measures but not roll back previous reforms or take “unilateral steps,” Dijsselbloem said, noting that Greece’s demand for a “bridge” agreement was essentially “just another word” for an extension.
The Eurogroup chief underlined the need to “rebuild trust.” He suggested that a new program would not differ greatly from the previous one. “The rules and regulations talk about strict conditionalities. It would still be about fiscal sustainability,” he said.
Varoufakis insisted that he was prepared to sign the text he was shown by Moscovici “there and then” but didn’t know why the wording was changed, although he didn’t explain either position.
He still said he believed a deal would be struck before what’s left of the rescue packages runs out on Feb. 28 and that Athens is confident of a four-month extension he said isn’t an extension an that the government was willing to relent on some conditions it had opposed.
“I have no doubt that within the next 48 hours Europe is going to come together and we shall find the phrasing that is necessary so that we can submit it and move on to do the real work that is necessary,” he said.
Moscovici, however, stressed that there is “no alternative to the extension of the current program.”
He called on the Greek government to request an extension, adding that there would be “flexibility over the short term.” “During the extension, we will have time to work on details,” he said. “We have to be logical, not ideological.”
Moscovici said the Greek side had put forth vague ideas during earlier talks with Troika envoys, leaving the lenders and the Eurozone flummoxed about just what Tsipras and Varoufakis want as the SYRIZA team keeps an eye on the electorate it promised relief from harsh austerity measures imposed by earlier governments on Troika orders.
Varoufakis, who had said that Greece would reject the Troika memoranda outright now said it will accept 70 percent of it but the lenders want it all or said it will be they, not Greece, who will walk.
European Commission President Jean-Claude Juncker made a last-ditch effort at a compromise but Varoufakis said it was torpedoed by Eurozone finance chiefs playing hardball with Greece.
Varoufakis said it was Dijsselbloem who changed the terms and demanded that Greece stick to the deal that SYRIZA had flatly rejected while campaigning and as soon as it took office after the Jan. 25 elections.
“The next step has to come from the Greek authorities,” Dijsselbloem told reporters. “They have to make up their minds whether they will ask for an extension.”
Varoufakis said Greece had no choice but to refuse the statement on offer. “In the history of the European Union nothing good has ever come out of ultimatum,” he told reporters after the meeting.
Greece is willing to extend the current aid program as long it’s done on the right terms, Varoufakis said.
Without a deal, Greece could run out of money by the end of March, forcing Tsipras to consider abandoning his promises to the electorate or even leaving the single Eurozone.
(Material from the Associated Press was used in this report)