Eurogroup gives Athens an ultimatum to request extension by Friday

The Eurogroup gave the Greek government until Friday to request an extension to the current bailout program, while noting that there are no other alternatives.

The extension, according to Eurogroup chief Jeroen Dijsselbloem, will allow some flexibility, but involves many commitments. The Greek side as rejected Mr. Dijsselbloem’s plans, stressing that it is irrational and an unacceptable insistence upon the implementation of the bailout.

Mr. Dijsselbloem claimed that Greece’s best option was to request an extension of the current program, so that there is time to discuss future arrangements over the next few months. The Dutch minister was disappointed that the discussions over the previous days had not resulted in an agreement and stressed that the ball is now in the Greek court. A Eurogroup may be scheduled for Friday in order to further pressure the Greek government.

When asked what would happen on the 1^st of March, should Greece not request an extension, Mr. Dijsselbloem responded that he heard Yanis Varoufakis speak of a “bridge solution”, which the Dutch minister claimed is an extension of the current program and as such, he was confident that a solution was still possible.

Such a program though would not allow any unilateral actions and every proposal for a change of measures must be accompanied by costed alternatives. Additionally, Mr. Dijsselbloem demanded that Greece commits to the payment of its loans, that the budget is not derailed and that the current program remains broadly on track.

The European Commissioner for Financial Affairs Pierre Moscovici outright declared that there is no alternative solution other than an extension of the current program, stressing the need to be ‘rational’ rather than ‘ideological’.

The Greek side has accused the Dutch minister of presenting a different text to the Eurogroup to the one that Athens discussed with the Commission. The Greek government specifically claims that Mr. Dijsselbloem presented a text that he prepared with the German Finance Minister Schäuble. The Eurogroup chief admitted that various texts were composed, some of which with the Greek side’s contribution

The International Monetary Fund’s Christine Lagarde stressed that a successful review of the current program is carried out by the troika, then no further funds will be paid out. The European Stability Mechanism chief Klaus Regling also argued that the 11 billion euros in the FSF must also be returned to EFSF/ESM.