By Judith Ugwumadu | 17 February 2015
Eurozone finance ministers have set a deadline of Friday for Greece to agree an extension of its international bailout following the collapse of talks on reforms to the support package yesterday.
If the country does not agree an extension to the programme with the current €240bn bailout deal with the ‘troika’ of the European Union, the European Central Bank and the International Monetary Fund, the country’s government could run out of money when the package expires on February 28.
This ultimatum came after the country rejected a six-month extension of its bailout programme proposed by the Eurogroup, which represents the members of the single currency.
Following the break up of the talks, Greek finance minister Yanis Varoufakis said that the country’s newly-elected government had pledged to challenge the current deal and was not interested in ‘cosmetic changes’ to the programme, he added.
‘It is not a bluff because it is the only option we have. It is plan A, there is no plan B.
‘We were offering to refrain from effectively implementing our own programme that we were elected to implement for a period of six-months. And all we were getting back [from the eurozone] was a nebulous promise of some flexibility that was never specified.
‘Under those circumstances, it proved impossible for the Greek government [but] the discussions continue.’
The government, led by the leftwing party Syriza, had called for a bridging loan from the troika for six-months to avoid a short-term cash crisis while it negotiates a less onerous bailout deal with the rest of the eurozone.
Varoufakis added that he was ‘ready to do whatever it takes to reach an honourable agreement’ over the next two days.
However, Dutch finance minister Jeroen Dijsselbloem, who chaired the Eurogroup meeting on Monday, said Greece had until Friday at the next meeting to request for an extension. This was because an extension to the programme needed to be approved by eurozone governments and EU institutions.
‘It is up to the Greek government to decide whether they want an extension on the bailout program,’ he added. ‘Within the program, a lot of changes are possible and there is flexibility. But the main features of keeping the budget on track [and] reforming the economy have to be maintained.’
