European creditors issue ultimatum to Greece

PanARMENIAN.Net - European creditors issued Greece with an ultimatum Monday, Feb 16, saying the country must accept a key condition in bailout talks by the end of the week or face having to meet its debt commitments on its own — a prospect that many in the financial markets think would leave Greece little option but to leave the euro, the Associated Press reports.

After a meeting of the 19 finance ministers of the eurozone over how to make Greece's debts sustainable broke down in seeming-acrimony after barely more than three hours, Greece was told it has to ask for an extension to its bailout program before further negotiations on the country's future financing and economic course can take place.

"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 for us to work on future arrangements," said Jeroen Dijsselbloem, the head of the so-called eurogroup.

Investors are worried that the two sides are poles apart especially as a cornerstone of the election campaign of Greece's new left-wing government was to scrap the bailout program. In return for 240 billion euros ($275 billion) of rescue money from 2010 onwards, successive Greek governments have had to implement a wide array of austerity measures such as deep cuts to spending and pensions.

The new Syriza government, in power for barely three weeks, blames those measures for the country's economic ills — the Greek economy is around a quarter smaller than in 2008, despite a recent modest return to growth while unemployment and poverty have swelled.

"It would be an act of subterfuge to promise to our partners to complete successfully a program we challenged the logic of," Greece's finance minister, Yanis Varoufakis, said, according to the AP.

Varoufakis insisted a deal between the two sides was achievable and that visible progress could still be made within the next 48 hours despite Monday's swift breakdown in discussions.

"We are ready and willing to do whatever it takes to reach an agreement over the next two days," he said. "Europe will do the usual trick: It will pull a good agreement or an honorable agreement out of what seems to be an impasse .... I have no doubt that, within the next 48 hours Europe is going to come together and find phrasing that is necessary so we can submit it and move on to do the real work that is necessary."

For all his talk about deadlines, Dijsselbloem also said there was scope for compromise provided the Greek government commits to the broad outlines of the current program, such as maintaining tight budgetary discipline.

He added that he thought it was "still feasible" that Athens would ask for an extension. "The request for an extension only commits to one thing: that you keep to the broad lines of the program," he said.