Greeks return to Eurogroup negotiating table to face unbending Germans
Greece's political leaders return to the negotiating table with European finance ministers later on Friday, even though Germany has already rejected a more conciliatory loan extension.
Germany said the Greek request for a six-month extension to its bailout loans, which are due to run out at the end of February, was a ‘Trojan Horse’ with too much room for interpretation.
That the Eurogroup meeting in Brussels will still go ahead, at 14:00 UK time, suggests eurozone authorities view progress as achievable, most likely anticipating further climbdowns from Greece.
On Friday, a spokesman for the Greek government said it had "done all it should at every level in an effort to find a mutually beneficial solution" for its creditors but will not be pushed to implementing the existing bailout program agreed by the previous government.
Gabriel Sakellaridis told local television that finance minister Yanis Varoufakis would maintain this stance at the Eurogroup meeting, "although conditions have matured for a solution to be found at last".
Another, unnamed, official was reported by Reuters as saying: “We have covered four fifths of the distance, they also need to cover one fifth."
Analysts and economists were less optimistic.
"Germany’s rejection of Greece’s loan extension is hardly surprising as the two countries haven’t had the most cordial relationship lately," said IG market analyst David Madden.
"Greece was never going to get emerging funding for its banking system and a no-strings-attached loan extension in quick succession. The game of cat and mouse between Germany and Greece continues, and the debt-stricken nation will have to compromise in order to get assistance from the ECB."
The Greek proposal asked for the "best use of given flexibility in the current arrangement" and more help for the country's banks, calling for the European Central Bank to re-introduce the collateral waiver that was suspended earlier this month.
An initial EU response, according to sources quoted by Bloomberg, was that the Greek letter "may pave the way for reasonable compromise".
But Germany's finance ministry soon after rejected the proposal for not meeting the bailout requirements, saying the letter was “not a substantive proposal for a solution” .