Pessimism on both sides in Greece bailout talks

Asked if he expects a solution at the meeting in Brussels, German finance minister Wolfgang Schauble said that what he has heard of the past weekend’s technical-level discussions makes him “very sceptical”.

A Greek government official said the talks with finance ministers from the other 18 euro countries will be tough, and may not result in a firm decision.

The official said efforts to win over European creditors to Greece’s anti-austerity drive would be an “endurance course”.

Time is running out. If there is no deal by February 28, when Greece was supposed to conclude a review of the bailout, then its banks could be left without access to affordable funding.

Volatile Greek shares were down 4.4 per cent in midday trading yesterday, while the Euro Stoxx 50 index of eurozone shares shed 0.2 per cent.

Athens wants a substantial easing in the terms of repayment on its 240 billion euro (£177bn) rescue loans, which it received from other eurozone countries as well as the International Monetary Fund. It has also called for less budget austerity.

Greek prime minister Alexis Tsipras’s coalition government won elections on January 25 on the strength of a vow to end the austerity policies put in place to reduce debt, but which have also caused the economy to shrink by a quarter and unemployment to soar above 25 per cent.

Mr 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 February 28, when the current bailout deals ends.

However, Mr Schauble told Deutschlandfunk radio that Athens is in no position to make demands. He said: “Greece must see that you can’t keep living above your means and then keep making proposals for how others should pay even more.”