From the FT:
…A high-stakes meeting of eurozone finance ministers over the future of Greece’s bailout unexpectedly broke down early in deliberations after Athens angrily objected to a proposal that it continue with the terms of its current €172bn bailout, calling it “absurd” and “unacceptable”.
The draft text, obtained by the Financial Times, states that Greece would agree to a six-month “technical extension” of its current bailout, which Athens has long viewed as a red line.
“This would bridge the time for Greece authorites and the Eurogroup to work on a follow-up arrangement,” reads the statement.
Shortly after Athens issued its angry objections, EU officials said the eurgroup meeting broke up after less than four hours of deliberations.
The two-page draft, labelled “preliminary and confidential”, reads that Athens would “successfully conclude the programme, taking into account the new government’s plans” and promised the “best use of the existing flexibility in the current programme”.
A Greek government official said the statement was a “radical withdrawal” of an understanding Alexis Tsipras, the Greek prime minister, had reached with Jeroen Dijsselbleom, who chairs the committee of eurozone finance ministers.
The official added that those who wanted to continue to press Greece to accept the current bailout were “wasting their time”, adding that under the circumstances, “there can be no agreement today.”
That’s pretty clear, bend or break, Eurozone. Also from the FT, the EZ offered a small extension to deadlines:
The eurozone gave Athens until Wednesday night to reverse course. Jeroen Dijsselbloem, chairman of the eurogroup of finance ministers, said the time available for a Greek request was almost out: “We can use this week, but that’s about it,” he said. “There was a very strong opionion across the eurogroup that the next step has to come from the Greek authorities,” he added.
…Although officials said they could still get an extension approved if a request comes before the end of the week, Monday’s impasse suggests further talks may be futile and that the bailout is set to expire on February 28.
Without an EU backstop in place, eurozone officials are concerned market turmoil could begin anew and are particularly worried that it could spark a bank run in Greece, which could be impossible to stop.
It looks like market panic may be needed to grease the wheels of negotiation.