Greece set to apply for loan extension as pressure for deal mounts – as it happened
Rolling coverage as Athens and the eurozone battle to break the deadlock over its loan programme, after Monday night's talks collapsed
- Latest: Greece will apply for extension to loan agreement - Greek TV
- Tsipras says Greece will exit debt trap
- Schauble says Greece must decide
- Osborne warns it's crunch time
- Photos: EU finance ministers meeting now
6.19pm GMT
Greece will reportedly apply for an extension to its current loan agreement, distinguishing this from its full bailout programme. Helena Smith reports:
Greek state television Nerit is tonight reporting that Athens will apply for an extension to its current bailout "under certain conditions."
Finance ministry officials are confirming the reports. Greece will apply for an extension of up to six months for its financial assistance program - most likely on Wednesday.
#Greece to ask Wed for 6-mnth xtension of loan agrmnt. Govt to ask for freeze of bailout measures http://t.co/difZNyDAl1 via @kathimerini_gr
6.13pm GMT
Investors are clearly hopeful a deal can be reached between Greece and its creditors before the money runs out, to judge by the reaction to Monday's events on European stock markets, which turned in a mixed performance. The UK in particular is edging closer to its record high, helped by inflation data which suggested there would be no early rise in interest rates. The final scores showed:
6.01pm GMT
There may be a certain weariness creeping in:
Greece headlines are going to continue to be deal, no deal...bailout extension, no extension...talks fail, resume...until they're not...
6.00pm GMT
Here's a link to Tsipras' full speech to the Greek parliament (in Greek):
Tsipras' office releases speech to parliament Full Here: http://t.co/zTLd0FIjka #Greece
5.56pm GMT
A Grexit is almost inevitable, in the view of Alastair Winter, chief economist at Daniel Stewart. He writes:
There is probably too much coverage of Greece already but most people including the Eurofederalists (notably Juncker, Draghi, Lagarde) still seem to think that another can-kicking exercise can work somehow. However, whatever fine words may or may not be agreed, any deal will would quickly unravel for two reasons.
1. It is not just a matter of principle or politics for the German Government that Greece sticks to the current programme and pays its debts in full, it is also a legal obligation under the Maastricht Treaty, for which it would have to account for any breach to the constitutional court in Karlsruhe.
5.04pm GMT
And now something from the European Central Bank on the Greek situation, specifically from governing council member Christian Noyer:
4.56pm GMT
More comments from Tsipras:
#TSIPRAS: TO CALL NEW ELECTIONS IF EUROGROUP DEAL FAILS - #GREECE READY TO AGREE LOAN EXTENSION NOT TIED TO BAILOUT - MNI- #forex
Syriza would win majority in new Greek election...
4.33pm GMT
The Greek parliament is due to vote on its contentious reform measures - which it is pressing ahead with in defiance of its bailout agreement - on Friday,.
Greek parliament to vote on social reform bills Friday http://t.co/rUSU5CvCwS
4.21pm GMT
Greek prime minister Alexis Tsipras has given an interview to German magazine Stern, in which he reiterates his usual messages.
Anyone suggesting the current programme should be extended by six months is wasting their time, he said, adding:
We don't need [a Plan B] because we will stay in the euro, but we will not achieve this goal at the expense of the weak.
3.59pm GMT
And here's why the Greek banks need the ECB's support:
Greek Banks Need More Emergency Funds as Deposits Drop - Bloomberg http://t.co/qyBMZF0IAS pic.twitter.com/E1ALqFuD30
3.53pm GMT
With withdrawals from Greek banks reportedly picking up, the European Central Bank's support through its emergency funding programme is key.
The ECB is due to review its assistance on Wednesday, but is unlikely to pull the plug while there is a chance of a deal between Greece and its lenders being negotiated (however far apart they may seem), Reuters reports:
The ECB's Governing Council meets on Wednesday and will review the provision of so-called Emergency Liquidity Assistance (ELA) to Greek banks, as Greece is at loggerheads with euro zone governments over the future of its international bailout, which expires at the end of this month.
Provision of the ELA funding is essential to the survival of Greece's banking sector, and hence to the country's continued membership in the euro zone.
3.43pm GMT
What are the options for Greece and the EU? Economics editor Larry Elliott has looked at the possibilities, and here's a flavour:
Brussels and brinkmanship. It's a familiar mix. The EU has been there many times before. The latest episode involves the standoff between Greece and the other 18 eurozone members over whether the new Syriza-led government should be forced to stick to the terms of its bailout, despite the Greek people voting for an end to austerity in last month's general election.
The assumption, both in European capitals and the financial markets, is that a deal will be done. That, after all, is what normally happens. An honest broker proposes the outlines of a deal, both sides give a little and a compromise is reached in the early hours of the morning.
3.32pm GMT
Here's an updated timetable of events to watch out for in the Greek crisis, courtesy of Deutsche Bank:
3.27pm GMT
Time for a recap.
"There has been a custom that newly elected governments act differently from their pre-election promises. I am saying it again, we are thinking of actually implementing our promises for a change."
We are not much further than we were. And as we know the situation in Greece is not getting any better."
"Greece must decide does it want this programme or does it not.
We are reaching crunch time for Greece and the eurozone, and I'm here to urge all sides to reach an agreement, because the consequence of not having an agreement would be very severe for economic and financial stability.....
What Britain really needs to see is competence not chaos.
There is also a chance that Athens decides to drag talks beyond the deadline as the mixture of strong public support at home and the government's own inexperience could lead Athens to play hardball.
In terms of alternative scenarios, there is a 25% chance that Greece decides to let the current program end on 28 February to then apply for a new program (this may require capital controls in the interim to prevent a large deposit flow from Greek banks). Finally, there is a 15% probability that Athens decides to escalate the matter by calling a referendum, not on euro membership but on whether or not to apply for a new program.
3.00pm GMT
<drum roll>...... The Greek government's candidate for the presidency is....
Prokopis Pavlopoulos!
Pavlopoulos is #Greece's govt candidate for Prez, an old politician of New Democracy, former Minister in Karamanlis cabinets
Applause for Tsipras after announcing conservative presidential candidate, Prokopis Pavlopoulos #Greece pic.twitter.com/wbgNBAfx26
tsipras says thousands of greeks are inspired by the new policies just minutes after nominating pavlopoulos for president. #sarcasm?
2.48pm GMT
Tsipras: "The impasse at Eurogroup cannot be solved by technocrats but political leaders. We are hopeful of solution" #Greece
2.45pm GMT
Alexis Tsipras is now explaining what went wrong at last night's eurogroup .
He says that Greece was prepared to sign the proposal drawn up by commissioner Pierre Moscovici, only for it to be replaced at the last minute by Jeroen Dijsselbloem (as finance minister Varoufakis explained last night).
2.42pm GMT
Tsipras has condemned that notorious cartoon of Wolfgang Schauble in Nazi uniform.
Tsipras: We denounce the 'Avgi' cartoon. No one has the right to play around with history's ghosts.
2.40pm GMT
Alexis Tsipras tells MPs that his government will begin the task of fixing Greece's humanitarian crisis.
And he also vows to give workers the right to negotiate their pay collectively, reversing one of the country's austerity measures.
Tsipras: We will reinstate collective wage bargaining, which was abolished by the Troika. (via @ekathimerini) #Greece
Hmmm, so much for Greece not implementing new measures unilaterally.
2.35pm GMT
Ouch. Tsipras has just accused Germany's Wolfgang Schiuble of losing his cool at last night's eurogroup meeting, and expressing words that undermined Greece.
2.33pm GMT
2.33pm GMT
Alexis Tsipras then insists that Greece is in no hurry, and will not be forced to compromise.
"We are not in a hurry and we are not compromising," says Alexis Tsipras, who is in a hurry, and will have to compromise. (h/t @YanniKouts)
2.31pm GMT
Over in Athens, Greek prime minister Alexis Tsipras is announcing his nominee for the presidency....and attacking the mistakes of the past at the same time.
Speaking in parliament, Tsipras insisted that Greece can no longer be treated like a colony, or a European pariah .
* Greek PM says Schaeuble should not pity people who raise their head high - RTRS
2.23pm GMT
In another press room, Latvia's finance minister Valdis Dombrovskis has predicted that a deal will be reached in time:
Dombrovskis: #Greece bailout review completion is precondition for release of funds, that is why extension is best option
Dombrovskis: no concrete schedules for visit to #Greece but in discussions
Dombrovskis, no planning for consequences of no agreement with Greece because such a thing will not happen. He's the new Olli Rehn
2.04pm GMT
My conclusion after Schiuble's press conference: Germany isn't going to move one inch and already said goodbye to Greece as a-zone member
2.04pm GMT
Wolfgang Schiuble went on to reiterate that his discussions with Yanis Varoufakis have not been acrimonious and he has again refused to speculate on quite what would happen after February 28 if there is no deal.
"I have said it three times, I have nothing to reproach about the personal contact I have had with my Greek colleagues."
"If this programme is not concluded in an orderly manner a difficult situation will ensue...But there is no sense in speculating over what will happen."
"All this speculating and excitement don't help anything. Of course, we know that whatever scenario the situtation for Greece is extraordinarily difficult and for Europe too. That is not in question at all. But it won't be made better by us excitedly running around the place...saying oh God, oh God, oh God... And I would point to the so-called financial markets... and they are completely unaffected, they are completely unaffected."
"I hope George Osborne will deliver some press conference and he is the most engaged mitglied [member] of the eurogroup."
Schiuble is basically saying We won't kick Greece out of the Eurozone, she'll hv to decide on her own (In the mean time we'll sterilize her)
1.55pm GMT
Wolfgang Schiuble went on to lay the onus on Athens to get a deal by the deadline.
"What do they want? What is their plan. I don't know, and so I am staying calm.... but bear in mind, today is 17 February, the programme requires that if nothing happens by 28 February, the programme is over and things can't happen without a deal in advance,".
1.53pm GMT
The German finance minister says he had heard from his Greek counterpart Varoufakis that the latter was "ashamed" of the caricature that had appeared of Schiuble as a Nazi in Greece.
1.46pm GMT
Germany's Wolfgang Schiuble is telling reporters that there was little progress at yesterday's eurogroup meeting, (writes my colleague Katie Allen who is watching the press conference).
Schiuble: Many Eurogroup colleagues pointed out their pensions, min wages lower than in Greece, they'd have to justify to their electorates
"We are not much further than we were. And as we know the situation in Greece is not getting any better."
"Greece must decide does it want this programme or does it not."
"Doubts have grown over what Greece actually wants".
"Sometimes I have the feeling that in Athens they don't know what they want and how things will work out."
1.27pm GMT
This brief video clip confirms that Greece's Yanis Varoufakis has left the Ecofin meeting:
#ECOFIN Council - Departure of #Greek Minister @yanisvaroufakis http://t.co/Myuyts5qF6 pic.twitter.com/iN5zYjyvPd
1.24pm GMT
Ed Conway of Sky News reports that UK chancellor George Osborne has raised the possibility of the Greek bailout negotiations floundering:
Latest: @George_Osborne intervened in the Ecofin meeting, asking @yanisvaroufakis if he'd explored consequences of these talks falling thru
1.18pm GMT
Germany's finance minister, Wolfgang Schauble, is giving a press conference in Berlin NOW, at the end of the Ecofin meeting.
1.08pm GMT
Bookmaker Paddy Power has cut the odds on Greece leaving the eurozone this year again, to 6/4 from 3/1.
"There hasn't been a stare down this frightening since the days of Medusa and if further talks fail the Greeks might be left with no option but to leave the Euro."
12.35pm GMT
Here's video footage of Yanis Varoufakis, Jeroen Dijsselbloem and George Osborne arriving at the Ecofin meeting this morning:
"The next step is the responsible step...
We will continue to deliberate, in order to enhance the chances and actually achieve a very good outcome for the average European. Not for the average Greek, the average Dutch person, or the average German."
12.26pm GMT
It appears that the Ecofin meeting in Brussels is wrapping up.
Sky News's Emily Purser reports that Greece's finance minister will head home tonight:
Hearing that Varoufakis has left the #ecofin meeting and is back at his hotel. Due to leave for Athens tonight #Greece
The Greek negotiating team are said to be leaving tonight/tomorrow too. So that suggestion of deal in 48 hours looking unlikely #Greece
11.48am GMT
Helena Smith, our Athens correspondent, says a senior Greek government official has announced that the search for a "mutually beneficial agreement" is still very much on.
Almost a third of Syriza, represented by the Left Platform, are against any sort of compromise on the anti-austerity front. The energy minister, Panagiotis Lafazanis, has taken an increasingly strident stance, rejecting any deal that might see the government rolling back on its pre-election pledges.
But an official close to Tsipras said this morning that he thought a mutually beneficial solution was still "absolutely possible." And he added: "The Greek government is not going to accept ultimatums. It is determined to honour its popular mandate and the democratic history of Europe. The memorandum [bailout accords that debt-stricken Athens has signed with its creditors at the EU, ECB and IMF] has prompted a humanitarian crisis and led the economy to complete impasse."
"We are good at haggling, it's in our DNA," said a former diplomat now a top level official in the EU.
Lafazanis, it should be pointed out, put the kibosh on Tsipras' selection of the veteran conservative Dimitris Avramopoulos as candidate for president, this week.
11.38am GMT
Now this looks encouraging. France's finance minister, Michel Sapin, has said there is a "consensus" with Greece about some of the issues around its bailout programme.
Sapin also suggested that Greece could run a smaller budget surplus than currently mandated in its agreement with its creditors; one of Athen's key demands.
11.37am GMT
The Greek government is telling reporters in Athens that it will not be forced into an ultimatum by the eurogroup, but still believe a deal will be reached.
Capital GR's Efi Efthimiou is tweeting the details
#Greece govt rejects "ultimatum", yet considers feasible that a mutually beneficial solution 4 Greece & partners can be reached
#Greece Also, govt sources say MoU has created a humanitarian crisis, led economy to a dead end. Common sense dictates its end
11.22am GMT
This was my favourite moment of last night's press conference, when Bloomberg's Hans Nichols asked Varoufakis if he'll soon be playing Monopoly with fake money:
GREAT SOUND. Varoufakis talks to @HansNichols about Monopoly and why Greece is NOT playing game theory OR poker http://t.co/xWXd1AKhyw
11.10am GMT
On a lighter note:
Ricardo Santos on today's #Eurogroup meeting. #Greece #Varoufakis pic.twitter.com/wi5fgWXTEz
11.05am GMT
European commissioner Pierre Moscovici has denied that Europe is divided over Greece.
Speaking to reporters in Brussels, Moscovici insisted that the compromise plan he had presented to Yanis Varoufakis did not show a clash between Brussels institutions.
There is no good cop, bad cop. There needs to be a margin of flexibility, room for politics, but everyone must understand the working process. The Commission contributes to the collective work of the Eurogroup. There is not one paper or another paper. There are contributions to a global agreement."
"The only privileged scenario is Greece in the euro zone and for that we have told the Greek government that they must now send a request for the extension of the programme, call it technical if you want ... We are united, we all think a solution is possible, there is no plan B," he said.
10.54am GMT
If you dig beneath last night's dramatic press conferences, and George Osborne's warnings, how close are we to a deal?
As I mentioned at the start, many astute observers reckon the two sides will manage to hammer out an agreement to extend Greece's funding beyond the end of this month.
@keithfrankish they are not contemplating Grexit. Actually, despite the rhetoric, neither is the Eurogroup. There will be a deal.
Greece - I think a deal is close, here's why: https://t.co/WEGrSBV8j6 - plus the risks around that view. A 2 min read.
The current stumbling block is clear - Greece does not want to pre-commit to "honour all financial obligations to its creditors" within the current programme.
This explains why they rejected yesterday's final Eurogroup draft out of hand as it explicitly called for Greece to honour "the agreed framework".
Europe may be just two words away from a deal on Greece http://t.co/yyh471dMdQ pic.twitter.com/SdKmG5Uu5T
10.25am GMT
Greece has slumped deeper into deflation, data just released shows.
10.11am GMT
Hello.... Greek bank shares have now turned positive, up by 3% after their early wobble. And the main Athens stock market is now flat, having been down 4.5% in early trading.
10.06am GMT
Negotiations between Greece and the eurozone look like "a train wreck", says Aengus Collins, lead eurozone analyst at the Economist Intelligence Unit.
Yesterday was far from a hard deadline but the way the eurogroup meeting collapsed -- in acrimony and over a basic building block of any ultimate accommodation -- was pretty dismal. At the moment, the two sides are running down their reserves of trust more quickly than they are narrowing the gulf that separates them.
The Economist Intelligence Unit remains of the view that a last-minute deal will be agreed, but the risk of Grexit remains high at 40%. Nor are these negotiations the end of the challenges for Greece; implementing any revised bailout programme is going to involve painful reforms that will test the resilience of the country's politicians and its voters".
9.54am GMT
Here's the scene inside today's meeting of EU finance ministers:
9.34am GMT
UK chancellor George Osborne has warned that Britain's economic stability would be hit if a deal can't be reached on Greece's bailout.
We are reaching crunch time for Greece and the eurozone, and I'm here to urge all sides to reach an agreement, because the consequence of not having an agreement would be very severe for economic and financial stability.
What Britain really needs to see is competence not chaos.
#ECOFIN Council #UK @George_Osborne I am here to urge all sides to reach an agreement #Greece http://t.co/pLCvsrlutT pic.twitter.com/22LmiAlcCD
9.33am GMT
And the tumble continues: inflation falls to a record low of 0.3% in January. But stripping out volatile oil and food it rises to 1.4%
9.32am GMT
Just in: Britain's headline inflation rate has hit its lowest rate since records began in 1989.
The consumer prices index rose by just 0.3% annually in January, down from 0.5% in December, dragged down by weak oil prices.
9.19am GMT
Greece's government debt is being hammered this morning too. Prices are sliding, driving up the yield (or interest rate) on the bonds.
The yield on Greece's benchmark 10-year bond has jumped from 9.9% to 10.6% this morning.
Brussels breakdown... Greek banks -7.1%. Greek 3-year yield up almost 200bps. pic.twitter.com/dNpZIJwmZ2
9.12am GMT
Analysts at Commerzbank reckon there's a 50:50 chance that this deadlock will result in Greece leaving the eurozone. More here.
Risk of Greece exiting the euro was raised to 50 percent by #Commerzbank after talks with euro-area finance ministers broke down on Monday
9.08am GMT
Today's 4.5% drop in Greek stock prices sounds severe, but it's largely in line with recent volatility:
8.49am GMT
Athens market falling but no panic. Yet.
8.40am GMT
The Athens stock market is falling sharply at the start of trading, after the collapse of last night's talks.
Bank shares are down almost 9%, as traders react to the latest deadlock.
#Greece Athens stock exchange already -4.49%, banks -8.78%
8.31am GMT
A slightly baffling quote from Cyprus's finance chief:
Cyprus FinMin: "Not sure which demand of Greece should Cyprus support"... Maybe this is a polite way of saying that Greece has no plan?
8.22am GMT
We just received photos from inside today's meeting of European finance ministers in Brussels.
They show that, despite last night's clashes, Jeroen Dijsselbloem and Yanis Varoufakis shared a handshake and a conversation before the start of the meeting:
8.17am GMT
Ed Conway of Sky News reports that Greek fatigue is growing in Brussels:
One finance minister told me: "Fatigue is setting in. Everyone is tired of having devoted so much of their time to Greece for so many years"
8.15am GMT
Jeroen Dijsselbloem has arrived at today's EU finance meeting, and pledged that eurozone minister are "ready to work" with Greece.
"I hope they (Greece) will ask for an extension to the programme, and once they do that we can allow flexibility, they can put in their political priorities."
"Of course we will see whether their programme remains on track. But that is the way forward. It's really up to the Greeks. We cannot make them or ask them. It really is up to them. We stand ready to work with them, also the next couple of days."
8.11am GMT
Luxembourg's finance minister Pierre Gramegna, argues that both sides have to make concessions to break last night's stalemate.
Speaking before today's ECOFIN meeting of finance ministers, Gramegna said:
"We can't remain in a blockade so everyone has to move a bit, water-down demands so we can find a compromise."
"There are flexibilities in the programme, we have to make use of them. When the Greeks are against the programme and don't want to work in this framework it will be tough."
8.06am GMT
Austria's finance minster has predicted that Greece will not be forced out of the eurozone.
Hans Jirg Schelling told the Deutschlandfunk radio station that he was "ruling out" the scenario where Greece goes bankrupt and leaves the euro zone.
"A 'Grexit' is in noone's interests - neither the euro group's nor Greece's".
7.56am GMT
Good morning.
Exclusive Pierre #Moscovici draft statement withdrawn from #Europgroup pic.twitter.com/iSC4k3U2ig
In terms of the next step now, another meeting could be held as early as Friday if Greece submits a request to extend the current programme. It seems all other options are now off the table for Greece and this will certainly put traders on high alert of an escalation of the situation.
A consolation is the fact Greece's Prime Minister has emphasised that a solution could be found in the next couple of days.
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