Germany holds up Greek bid for euro zone loan extension
By Renee Maltezou and Jan Strupczewski
ATHENS/BRUSSELS (Reuters) - Germany rejected a Greek proposal for a six-month extension to its euro zone loan agreement on Thursday, saying it was "not a substantial solution" because it did not commit Athens to stick to the conditions of its international bailout.
Berlin's stance, describing the carefully worded Greek letter as a "Trojan horse" for shirking commitments, set the scene for tough talks at a crucial meeting of euro zone finance ministers on Friday. Greece's leftist-led government is scrabbling to avoid running out of money within weeks and will face pressure to make further concessions in Brussels.
As the biggest creditor and EU paymaster, Germany has the clout to block a deal and cast Greece adrift without a lifeline, potentially pushing it towards the euro zone exit. But some officials in other capitals saw the German response as tactical and forecast agreement by the weekend after more wrangling.
Nonetheless, despite warm words from those who saw the Greek move as a step forward, Athens remained isolated after a meeting of euro zone officials to prepare Friday's talks, sources close to the negotiations said. All agreed with Germany that Greece must commit more clearly to abiding by its current credit terms.
A Greek official said Prime Minister Alexis Tsipras had a 50-minute telephone call with German Chancellor Angela Merkel on Thursday, believed to be their first substantive exchange since the Athens government was elected on Jan. 25.
"The conversation was held in a positive climate, geared towards finding a mutually beneficial solution for Greece and the euro zone," the official said. A German spokesperson confirmed the call but would not comment on the content.
Tsipras also spoke to French President Francois Hollande, who, according to a Greek official, promised to raise the issue with Merkel when she visits him in Paris on Friday.
Earlier, Finance Minister Yanis Varoufakis formally submitted the request after days of backstairs negotiations with the European Commission and the chairman of the Eurogroup of finance ministers of the currency bloc. Continued...