Germany cool over Greece deadlock proposals

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Greece has sent its European creditors a last-minute proposal meant to unfreeze talks on its bailout programme and end uncertainty over its future in the euro.

However, hopes of a deal at a forthcoming emergency meeting of eurozone finance ministers were dampened by Germany, the main creditor.

The Greek government offered to extend its rescue loan agreement by six months, in line with demands by the 19-country eurozone in order to give all sides more time to hash out a more permanent deal.

The new administration held back, however, on offering to continue in full a series of budget cuts and reforms that the eurozone has required since 2010 in exchange for loans which Greece blames for devastating its economy.

German finance ministry spokesman Martin Jaeger said in a statement it “is not a substantial proposal for a solution”.

He said it amounts to a request “for bridge financing without fulfilling the demands of the (bailout) programme,” namely the budget measures.

It does not, he added, correspond to what the eurozone countries had demanded of Greece before talks broke down on Monday.

The European executive Commission was somewhat more upbeat. Spokesman Margaritis Schinas said Commission president Jean-Claude Juncker “sees in this letter a positive sign which, in his assessment, could pave the way for a reasonable compromise in the interest of financial stability in the euro area as a whole”.

Mr Schinas said Mr Juncker held talks with Greek prime minister Alexis Tspiras and Dutch finance minister Jeroen Dijsselbloem, who heads meetings of eurozone finance ministers.

A text of Greece’s letter shows it proposing measures including a six-month extension to the country’s rescue loans, and a promise to start work on a new financial support deal “between Greece, Europe and the International Monetary Fund” which could follow the current bailout agreement.