Greece eurozone talks fail to reach consensus on renegotiation of €240bn bailout deal

British PM, David Cameron, has urged his Greek counterpart, Alexis Tsipras, to break the stalemate

Anti-austerity protesters outside the Greek parliament in Athens make their feelings clear as the country’s new government attempts to renegotiate bailout terms with EU finance ministers (Getty Images)

Temperatures in Athens dropped to freezing today, but the tents of unemployed workers who used to clean state buildings still remained camped outside the country’s Finance Ministry in a continued show of defiance. They were some of the thousands who lost their jobs as part of layoffs demanded by Greece’s international creditors to rein-in the country’s finances.

Almost 2,000 miles away, in Brussels, Greece’s new Prime Minister took his plea for an easing of austerity to the other EU leaders, attempting to forge a political consensus for a new deal on the Greek bailout after the failure of the opening negotiations.

Alexis Tsipras arrived for his first EU leaders’ summit hours after his finance minister failed to reach a breakthrough with 18 other eurozone ministers, despite seven hours of talks. They could not even agree on the next procedural steps, as Greece attempts to renegotiate the conditions on its €240bn bailout after the election victory last month of the far-left Syriza party.

But both Mr Tsipras and his EU creditors struck an upbeat note as they arrived for the summit. “I’m very confident that together we can find a mutually viable solution in order to heal the wounds of austerity, to tackle the humanitarian crisis across the EU and bring Europe back to the road of growth and social cohesion,” said Mr Tsipras.

German Chancellor Angela Merkel, who has insisted that Greece must stick to the terms of the bailout and pay back all its debt, also said she was willing to listen to Greek proposals, striking a conciliatory tone. “Europe always aims to find a compromise, and that is the success of Europe,” she said. “Germany is ready for that. However, it must also be said that Europe’s credibility naturally depends on us respecting rules and being reliable with each other.”

Ahead of the summit, EU diplomats said they did not want leaders bogged down in negotiations over the bailout, preferring to leave negotiations for the finance ministers, who will meet again on Monday. But Mr Tsipras met a handful of his counterparts on the sidelines, including David Cameron. A British official said that Mr Cameron urged Mr Tsipras to find a solution with his eurozone partners. “Stalemate is not the way to get Europe’s economy moving.”

But there was little sign of EU leaders shifting from their insistence that Greece must first finish a bailout programme agreed with the International Monetary Fund, European Commission and European Central Bank. That programme expires on 28 February, and if Greece refuses to extend the deal, they will be denied the final €7bn tranche of money, which could lead to a default on the country’s debt and an exit from the eurozone.

“Time is running out,” warned the Finnish Prime Minister, Alexander Stubb. “In the past five years we’ve done everything we can to keep Greece in the eurozone and we will continue to do that, but commitments are commitments and we must all stick to them. The ball is in the court of the Greeks.”

Part of that court belongs to George Katrougalos, the minister charged with reforming Greece’s inefficient public sector. Speaking from his office in central Athens, Mr Katrougalos said he hopes to revamp the much vilified civil service within the next six months, before returning to his job teaching law. “[Our government] wants to break with the legacy of clientelism and patronage and reorientate our administration to the traditions of the social model of Europe,” he explained. In an effort to streamline the public sector after the financial crisis struck, a third of the personnel were sacked in less than four years, with sectors like education and health among the most affected. Some of those who lost their jobs were still protesting today.

David Cameron and the Greek PM Alexis Tsipras met on the sidelines of the EU leaders summit in Brussels yesterday (Reuters)

Mr Katrougalos says the layoffs were “arbitrary,” lacking rational or proper evaluation and hopes to repair the “injustice” by rehiring the personnel. As part of another controversial move, the coalition administration has reneged on Greece’s privatisation plans calling it a “crime” to sell off key national assets. “We will not go ahead with new privatisations but we will respect those which have been agreed upon,” Mr Katrougalos explained.

There are, however, some projects over which such agreement is disputed. Part of Greece’s main port of Pireaus was sold in 2009 through a concession to the Chinese shipping giant Cosco, who also hoped acquire another 67 per cent of the port. Pireaus, located close to three continents is of critical commercial and geopolitical value.

Today, Chinese Premier Li Keqiang urged Mr Tsipras to ensure protection of the rights of China’s companies. Greece’s government said on Wednesday it was sticking to plans to halt the sale of its two biggest ports, Piraeus and Thessaloniki. Cosco manages two of the Piraeus port’s cargo piers. Under a privatisation scheme last year, it had been shortlisted, along with four other suitors, as a potential buyer of the majority of the port. Mr Li said China hoped “the two sides can abide by their promises”.

Mr Katrougalos remains adamant that Greece’s negotiation with the EU will continue along its current course. “We are not ready to submit to any kind of blackmail,” he explained. “We respect our partners and… we expect the same from them, so if they expect any kind of submission they are not going to receive it.”