Bailout talks collapse as Greece snubs creditors

 Talks aimed at extending Greece’s bailout package – and preventing a Greek exit from the eurozone – came to a halt less than four hours after negotiations got underway on Monday in Brussels.

“Everyone’s disappointed,” a dispirited Austrian Finance Minister Hans Jörg Schelling said after the inconclusive Eurogroup meeting.

Following the collapse of the crunch talks, Eurogroup head Jeroen Dijsselbloem said the general feeling would be for the Greek authorities to seek an extension to its bailout program, which expires at the end of the month.

“Given the timelines we have… we can use this week but that is about it,” said Dijsselbloem, who is also the Dutch finance minister. “If the request for an extension would come in…if a positive outcome can be envisaged – we could have an extra Eurogroup on Friday,” he added.

‘No plan B’

The high-stakes negotiations broke down after Athens rejected as “unreasonable and unacceptable” an offer by its international creditors demanding that the debt-ridden country continue its current bailout unchanged.

However, Greek Finance Minister Yanis Varoufakis remains confident Athens will reach an agreement with its lenders, saying he had “no doubt” that the parties would agree on conditions that would pave the way for a an extension request “within the next 48 hours.”

He also stressed that Greece remained ready to do “whatever it takes” to reach a deal, saying this “is the only option we have. This is plan A, there is no plan B.”

‘Disaster’ ahead?

Maltese Finance Minister Edward Scicluna warned that Greece’s failure to request an extension could spell disaster for the country.

“That would be it; it would be a disaster,” he told reporters. “Greece has to adjust, to realize the seriousness of the situation … It all depends on the realization by Greece of the real seriousness of the situation because time is running out.”

Germany’s dpa news agency said that it had seen a leaked draft of the Eurogroup proposal, reporting that it would “request a six-month technical extension of the current bailout program as an intermediate step.”

A Greek government official, who spoke to AP news agency only on condition of anonymity, called the proposal a “radical departure” from what had been previously discussed.

Open to talks

Leaving the meeting, European Commission Vice President Valdis Dombrovskis stressed to reporters that the 19 eurozone finance ministers were ready to hold further talks with Greece, but said that it was now up to Athens to request an extension of its 240-billion-euro ($274-billion) rescue package.

“We are ready to continue the talks so basically it’s now up to the Greek authorities to decide whether they want to request an extension of the program,” Dombrovskis said, adding that the timing of new negotiations depends on Greek Prime Minister Alexis Tsipras’ administration.

Greek capital flight

A new opinion poll showed that nearly 70 percent of Greeks want a “fair” compromise with international lenders, while 30 percent said that Athens should stand tough even if it means reverting to the drachma currency. The poll, however, also found that 81 percent want to stay in the eurozone.

This comes as investment bank JP Morgan reported that deposit outflows in Greece have picked up, with some 2 billion euros fleeing Greek banks every week.

DW