Greece, creditors still far apart going into new debt talks

Pro-government protesters wave Greek flags in front of Greece’s parliament to support the newly elected government’s push for a better deal on Greece’s debt, in central Athens

Greece’s radical left government and its European creditors were heading into new talks yesterday on the debt-heavy country’s stuttering bailout program, but expectations are low despite a fast-approaching deadline for some kind of deal.
Volatile Greek shares were down 4.4 percent in midday trading, while the Euro Stoxx 50 index of eurozone shares shed 0.2 percent
Optimism was curbed by German Finance Minister Wolfgang Schaeuble, who said that what he’s heard of technical-level discussions over the weekend makes him “very skeptical” that a solution can be found at the meeting in Brussels.
Athens wants a substantial easing in the terms of repayment of its 240 billion euros in rescue loans, which it has received from other countries that use the euro and the International Monetary Fund, as well as less budget austerity.
Prime Minister Alexis Tsipras’ coalition government won elections on Jan. 25 on a vow to end the austerity policies that the country has been demanded to make to reduce debt, but which have also caused the economy to shrink by a quarter and unemployment to soar above 25 percent.
Tsipras wants to scrap the existing bailout deal and replace it with a new one. In the meantime, he wants a short-term “bridge agreement” that can keep Greece solvent after Feb. 28, when the current bailout deals ends.
Germany’s Schaeuble told Deutschlandfunk radio that Athens was in no position to make demands.
“Greece must see that you can’t keep living above your means and then keep making proposals for how others should pay even more.”
“I feel sorry for the Greeks,” he added. “They’ve elected a government that’s behaving pretty irresponsibly at the moment.”
A Greek government official said Sunday the talks with finance ministers from the other 18 eurozone countries will be tough, and may not result in a decision. He said efforts to win over European creditors to Greece’s anti-austerity drive would be an “endurance course.”
But time is short. If no deal is reached by Feb. 28, Greece’s banks could be cut off from affordable funding from the central bank. A serious deterioration in Greek banks’ finances could cause depositors to withdraw money, potentially causing a collapse in the banking system. Ultimately, that could force the government to leave the eurozone — a move informally dubbed Grexit — so that it can print its own money and rescue its banks.
Any agreement with creditors will require approval by national parliaments in eurozone countries, which would add further delays. AP