Greece eurozone talks end in stalemate but Varoufakis dismisses fears of a 'Grexit'

Both sides played down the setback and fresh talks were scheduled for Monday

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The Independent Online

The crisis talks lasted for seven hours yesterday – but eurozone finance ministers were unable to reach even a joint statement on Greece's debt problems.

Although it had been known that an agreement would probably not be reached in Brussels on Wednesday, the complete stalemate between leftist, anti-austerity government Syriza and its international creditors was seen by some analysts as signalling that negotiations could be more protracted than thought.

Both sides played down the setback, insisting there had been no rupture, and said fresh talks were scheduled for Monday.

But Greek stock prices fell when it emerged that Greece's new Finance Minister Yanis Varoufakis had walked away from a draft deal to extend current credit terms after conferring with fellow Greek officials.

"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," Varoufakis said.

Spelling out how Greek voters had rejected the "toxic" austerity dictated by international lenders that rescued Greece after the global financial crisis, he said he hoped for a "healing deal" on Monday and stressed that, while much remained undone, "not finding a solution is not in our rationale".

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.


Diplomats said efforts to clinch a joint statement, as it went through drafts, were aborted after Varoufakis consulted government colleagues. A text seen by Reuters showed that the Eurogroup had wanted to agree on “extending” the present loan programme - a phrase that is anathema to Athens.

"It was a disappointing outcome, not because they failed to agree but that they couldn't even agree on a small basis on which they could negotiate in the following days to smooth the way to a meeting on Monday," Mathias van der Jeugt, a strategist at KBC Securities, told Reuters.

"So they have to start from scratch on Monday... and in the run-up uncertainty should remain and keep Bunds bid and peripheral spreads under pressure though modestly."

Meanwhile, it was reported that Greek Prime Minister Alexis Tsipras no scheduled meeting with German Chancellor Angela Merkel at a European Union leaders meeting today - but the two leaders may have an informal one, Greece's government spokesman said.

"There is no arranged meeting (between Tsipras and Merkel), but it is possible they could meet informally," government spokesman Gabriel Sakellaridis told Mega TV on Thursday.

Tsipras rejects any extension of the €240 billion package, which expires on 28 Februay. He refuses to cooperate with the "troika" of EU/ECB/IMF officials overseeing Greece's finances and demands 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 eurozone, possibly setting off wider market turmoil.

But Varoufakis said a "Grexit" was "absolutely not" on the cards.

Additional reporting by Reuters