Eurogroup fail to agree Greek deal

As expected, Greece’s new government and its international creditors failed to agree on a way forward on the country’s unpopular bailout and will try again on Monday.

In seven hours of crisis talks in Brussels that ended after midnight, euro zone finance ministers were unable to agree even a joint statement on the next procedural steps. Both sides played down the setback, insisting there had been no rupture.

“We had an intense discussion, constructive, covering a lot of ground, also making progress, but not enough progress yet to come to joint conclusions,” Jeroen Dijsselbloem, the chairman of Eurogroup finance ministers, told a midnight news conference.

“We didn’t actually go into detailed proposals, we didn’t enter into negotiations on content of the programme or a programme, we simply tried to work next steps over the next couple days. We were unable to do that.”

Looking as casually confident as when he had arrived at his first such talks, Varoufakis said: “Now we are proceeding to the next meeting on Monday. We hope that by the end of that one there is going to be a conclusion in a manner that is optimal both for the perspective of Greece and our European partners.”

Spelling out how Greek voters had rejected the “toxic” austerity dictated by international lenders that rescued Greece after the global financial crisis, he said he hoped for a “healing deal” on Monday and stressed that, while much remained undone, “not finding a solution is not in our rationale”.

German Finance Minister Wolfgang Schaeuble has said that if Greece is not willing to request an extension of the current bailout – the biggest in financial history – “then that’s it”, appearing to rule out further assistance or debt forgiveness.

Financial markets have been on edge over the Greek crisis because of fears that failure to reach a deal soon could trigger a Greek default and a disorderly exit from the euro zone, possibly setting off wider market turmoil.

Asked whether a so-called “Grexit” was on the cards, Varoufakis told reporters on arrival: “Absolutely not.”

He set out the new government’s thinking on interim steps towards a negotiated debt restructuring but presented no formal document, to the surprise of some ministers, participants said.

“Positions are now a bit clearer, but there is a very long way to go in the coming days,” said one EU source.

Keeping a close eye on a problem that could reprise some of the banking and financial market turmoil of three years ago, ECB chief Mario Draghi was present throughout the talks.

Athens’s partners have warned that time is short since any changes to the current bailout may require ratification by several national parliaments in creditor countries.

Lagarde: “We have to listen”

Varoufakis and his delegation had a prior meeting with International Monetary Fund chief Christine Lagarde, who flew to Brussels to join the talks in a sign of the IMF’s concern about the Greek crisis, which is weighing on global financial markets.

“They are competent, intelligent, they’ve thought about their issues. We have to listen to them, we are starting to work together and it is a process that is starting and is going to last a certain time,” Lagarde told reporters.

In Athens, a Greek official said Varoufakis had discussed with Lagarde and Dijsselbloem some form of “bridge agreement” for funding the state once the current bailout deal expires.

Meeting his counterparts collectively for the first time, Varoufakis worked the room before talks started, shaking hands first with Schaeuble, then others. He looked relaxed in a designer checked scarf and his trademark open-neck shirt.

Most analysts believe the odds still favour an agreement between Greece and the euro zone emerging later this month after lots of sound and fury.

“We think that the European community and Greek authorities will reach a compromise such that there will not be an exit of Greece from the euro zone,” said James McCormack of credit ratings agency Fitch Ratings.

Source : Reuters