BAILOUT DISCORD

Ministers will try again on Monday

Crisis talks between Greece and the euro zone break up without an agreement.

BRUSSELS: Greece’s new leftist government and its international creditors failed to agree on a way forward on the country’s unpopular bailout on Wednesday and will try again on Monday, with time running out for a financing deal.

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.”

Greece would have no further contact with experts from the European Commission, the International Monetary Fund and the European Central Bank before Monday, he said.

That was the opposite of how other EU ministers understood they had left matters when they headed home an hour or so earlier.

Looking as casually confident as when he had arrived at his first such talks, Greece’s laconic new Finance Minister Yanis 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.”

Diplomats said efforts to clinch a joint statement, as it went through drafts in which language can be as important as substance, were aborted after Varoufakis consulted government colleagues.

Hard-left Prime Minister Alexis Tsipras has stuck to his guns, knowing those who voted him into office last month are insistent he end a bailout deal Greeks blame for worsening poverty.

He rejects any extension of the current €240 billion package, which expires on Feb 28, refusing to co-operate with the “troika” of EU/ECB/IMF officials overseeing Greece’s public finances and demanding a “haircut” reducing its debt.

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.”

Economists polled by Reuters this week estimated a one-in-four chance of Greece leaving the 19-nation single currency area this year — the highest reading since the start of the Greek debt crisis in late 2009.

Most analysts believe the odds are still on 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 Fitch Ratings.

European Union leaders will take up the issue at their first summit with Tsipras on Thursday.

EU officials said they would be briefed on the ministerial talks but there would be no room for debt negotiation at a summit mostly devoted to the Ukraine-Russia conflict, fighting terrorism and longer-term reform of the euro zone’s governance.

At least 10,000 Greeks took to the streets of Athens and other cities on Wednesday to demonstrate support for Tsipras’s government in the Brussels negotiations. Smaller leftist satellite rallies were planned in Brussels, outside the ECB in Frankfurt and in London.

Protesters outside parliament in central Athens unfurled banners proclaiming “Bankrupt but Free” and “Stop Austerity”.

Tsipras tweeted a picture of the rally, with the message: “In the cities of Greece and Europe the people are fighting the negotiation battle. They are our strength.”