The Greek Finance Minister Yanis Varoufakis has been explaining his government’s bailout position, which has put it on a collision course with other eurozone members.
Athens wants a new deal over repaying its debts, without the agreed austerity measures and Varoufakis put its proposals to mostly hostile Eurogroup finance ministers at a meeting in Brussels.
He has refused to rule out a standoff with his country’s creditors.
Speaking in parliament on Tuesday he said: “We’re not seeking a clash. We will do everything to avoid it, but if you’re not willing to even consider a clash, you’re not negotiating.”
He has proposed a six-month transition during which Greece wants to be allowed to issue more short-term treasury bills as well as run a smaller budget surplus and receive European Central Bank profits on Greek bond holdings.
Before the meeting started, Spanish Finance Minister Luis de Guindos, whose country avoided a sovereign bailout but had to take EU aid to rescue its banks, spelt out the hard line. “Rules must be respected by all. They apply to all,” he told reporters on arrival.
Varoufakis had a prior meeting with International Monetary Fund chief Christine Lagarde, which both said was constructive. Lagarde flew to Brussels to join the Eurogroup meeting in a sign of the importance the IMF attaches to the Greek crisis.
“They are competent, intelligent, they’ve thought about their issues. We have to listen to them, we are starting to work together and it is a process that is starting and is going to last a certain time,” she told reporters.
In the Greek capital people were hoping for the best, but fear the worst.
One man was fatalistic saying: “What the European Union says is what will be done. ‘I give you money, you will do as I say’. This is how things are, there isn’t anything else.”
Another added: “It is difficult, let’s hope they will succeed but it’s difficult. The Europeans see us in a negative light.”
While a woman said: “I am very pleased with [ruling party] Syriza’s attitude even though at the same time I am somewhat insecure and afraid where this persistence and boldness might lead us. Still we have to fight.”
The financial markets are also seeing the situation in a negative light with share indexes sliding – particularly in Athens, where the main stock index fell 4.0 percent on Wednesday.
Investors are concerned that this showdown, with Greece refusing to be forced to make deep budget cuts and economic reforms, might lead to the country leaving the eurozone.
Asked whether a so-called ‘Grexit’ was on the cards, Varoufakis told reporters on arrival in Brussels: “Absolutely not.”