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Negotiations over how to keep Greece afloat
broke down abruptly Monday, demonstrating a wide gulf between Athens and its
European creditors and triggering a new, heightened state of uncertainty about
the country’s future inside the currency bloc. The breakdown in talks among
eurozone finance ministers leaves Greece and its lenders dashing to achieve
another financing arrangement for the obliged nation before its current bailout
arrangement terminates. The ministers cancelled the arranging session simply a
couple of hours after it started, saying Greece left them little any desire for
securing an understanding. The ministers, in turn, presented the new left-wing
government in Athens with an ultimatum: Agree to an extension of the current
€240 billion ($272 billion) bailout by the end of the week or lose the lifeline
of rescue loans that have sustained Greece for nearly five years.
A crucial meeting of eurozone
finance ministers over the future of Greece’s bailout broke
down in acrimony after Athens angrily rejected the bloc’s insistence that it
agree to complete its current €172bn rescue as “absurd” and “unacceptable”.
It is the second time in five days
that negotiations between the new anti-austerity Greek government and its
eurozone creditors have collapsed and it means Athens, whose public finances
are deteriorating fast, could soon be left with no European
financial backstop. The
eurozone gave Athens until Wednesday night to switch course and look for an
augmentation of the current project, which is because of terminate toward the
end of one week from now.
Greek Prime Minister Alexis Tsipras and
his finance minister, Yanis Varoufakis, oppose the terms of the rescue deal
from the eurozone and the International Monetary Fund, saying they are hurting
its economy and society.
“It’s
not a bluff, because it’s the only option we have,” Mr. Varoufakis said of his
government’s position after the meeting. “It’s plan A, there is no plan B.”
In
the event that the bailout closes as planned on February 28, the Greek
government will lose access to the last €7.2 billion cut of its present
bailout, conceivably abandoning it not able to make obligation reimbursements
approaching in March. That could, in the most pessimistic scenario, trigger a
progression of occasions that would compel Greece out of the eurozone.
“The general feeling [among ministers]
is still that the best way forward would be for the Greek authorities to seek
an extension of the current program,” said Jeroen Dijsselbloem, the Dutch
minister who presides over the regular meetings with his counterparts. “We
simply need more time,” he added.
Greek officials have said the
government could continue striving for a while, however there are questions. To
what extent it takes depends, all things considered, on Greek citizens. The
banks have as of now seen cash being withdrawn and progressively require
national bank advances. In the event that there is no bailout program, the
European Central Bank could pull the fitting on the banks. On the off chance
that it went to that, it truly would mean a major monetary emergency, with
maybe the burden of far reaching budgetary controls to prop up the banks and
potentially even the re-presentation of a national money. It's tricky to nail
down a date by which an understanding must be carried out to turn away a
monetary Armageddon, on the grounds that it relies on upon the activities of
citizens, bank clients and the ECB. Be that as it may time is getting short.
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