Time running out for deal over Greek debt bailout

Protesters outside the parliament in Athens support the government's stance. Picture: Getty

Finance minister Yanis Varoufakis insisted he was ready to do “whatever it takes” to reach agreement on Greece’s bailout in the next two days but he said Greece will not accept the austerity terms included in the current bailout programme.

Greece wants the conditions of its £178 billion bailout restructured.

Speaking after talks with EU finance ministers broke down earlier than expected, Mr Varoufakis said “within the next 48 hours” Europe would find the phrasing that was necessary to satisfy both Greece and Europe.

“Europe will do the usual trick: It will pull a good agreement or an honorable agreement out of what seems to be an impasse,” he said.

And he added: “I have no doubt that there is going to be a agreement in the end which will be very therapeutic for Greece.”

But he said there was “substantial disagreement” on whether to complete the current programme, which his government has pledged to scrap.

Mr Varoufakis also said that he had been presented with a draft communique which he had been ready to sign, but that it had been withdrawn minutes before the meeting started.

Greece’s current bailout expires on 28 February. Any new agreement would need to be approved by national governments so time is running out to reach a compromise, without which Greece is likely to run out of money.

After a meeting of the eurozone’s 19 finance ministers was ended abruptly, Jeroen Dijsselbloem, who chairs the gatherings, relayed his “sense of disappointment”. He said another meeting on Friday was possible if Athens makes the request.

“We simply need more time and the best way for that at this point is extend the current program which would allow a number of months us to work on future arrangements,” he said.

He said such a move could also help rebuild trust between Greece and the eurozone.

The Greek government has steadfastly refused to consider an extension of the bailout and instead wants a “bridging programme” to support its finances. Greece’s new government came to power last month on the promise to get rid of the current program.

The eurozone creditors, however, say the current programme should be extended to get more time to agree on a lasting solution.

“My strong preference is to get an extension of the programme, and I think it is still feasible,” he told a press conference.

Greece rejected what it says was an “irrational and unacceptable” demand from its euro partners. A Greek government official, who spoke only on condition of anonymity as they were not authorised to speak on the matter, said the proposals were a “radical departure” from what was previously discussed.

A draft statement from the meeting, which the Greek authorities rejected, envisioned Athens requesting a six-month extension to its current bailout programme.

The Greek government blames the austerity measures the country has had to enact in return for its rescue money from the eurozone and International Monetary Fund for many of the country’s ills. Despite a modest return to growth in 2014, Greece’s economy is still a quarter smaller than in 2008, while unemployment and poverty rates have swelled dramatically.