'Difficult' Greece bailout talks halted

  • 12/07/2015
Greek Finance Minister Euclid Tsakalotos leaves an euro zone finance ministers' meeting on Greece in Brussels, Belgium (Reuters)
Greek Finance Minister Euclid Tsakalotos leaves an euro zone finance ministers' meeting on Greece in Brussels, Belgium (Reuters)

Divided eurozone ministers have halted "very difficult" talks on a Greek bailout deal overnight, with just a day left before a final deadline for an agreement to stop Athens crashing out of the euro.

Sceptical governments such as Germany demanded more commitments to a reform plan, while Finland reportedly decided not to accept any new rescue plan for debt-laden Greece.

The meeting of the Eurogroup, comprising finance ministers from the 19-member single currency area, in Brussels was supposed to pave the way for all 28 European Union leaders to sign a final agreement at an emergency summit on Sunday night billed as the last chance to keep Greece in the euro.

Eurogroup chief Jeroen Dijsselbloem said the "issue of credibility and trust was discussed" amid widespread suspicion of a Greek government that has offered new reforms just days after voters rejected similar terms in a surprise referendum.

"We haven't concluded our discussions. It is still very difficult but work is still in progress," said Dijsselbloem after nine hours of gruelling talks, adding that they would resume on Sunday at 0900 GMT (9pm NZT today).

Maltese Prime Minister Joseph Muscat warned that Sunday "will be a long day" thanks to the "inconclusive" eurozone talks.

Finnish Finance Minister Alexander Stubb was more upbeat, despite reports that Finland's Parliament has decided it will not allow the government to accept any new bailout deal for Greece.

"We are making good progress," he said.

EU Commissioner for economic affairs Pierre Moscovici, who has been among the most sympathetic to Greece's plight, said: "I am always hopeful."

The proposals, including pension cuts and tax hikes, were approved by the Greek Parliament in the early hours of Saturday despite opposition within Tsipras's ruling radical Syriza party.

The Greek government hoped the vote would give it a mandate to continue the talks with the creditors - but it also revealed the depth of opposition to fresh austerity.

Three senior government figures were among 10 MPs who abstained or voted against, and several others from the ruling Syriza party stayed away, prompting commentators to predict a government shake-up.

Tsipras told Parliament the plan was "marginally better" than the proposals put forward by the creditors last month and that Greeks would "succeed not only in staying in Europe but in living as equal peers with dignity and pride".

EU President Donald Tusk has said Sunday's summit is a "last chance" for a deal.

Even if that happens, at least eight Parliaments will have to weigh in on a final accord, with Germany's Bundestag having to vote twice.