Berlin rejects Greek request for loan agreement extension

The German Government doesn’t think the Greek proposal offers any substantial solution

Berlin has rejected a Greek government’s request for a 6-month extension of the country’s loan agreement with its eurozone creditors.

According to reports by the German and French news agencies, Berlin believes that the Greek proposal doesn’t offer any substantial solutions.

“The document does not meet the criteria agreed upon by the Eurogroup on Monday,” the German finance minister’s spokesman said on Thursday, noting that the leftist Greek government is asking for a “bridge-deal” without committing to fulfill its obligations.

On the other hand, the European Commission’s response to the Greek request is more positive.

The EU announced on Thursday that Varoufakis’ letter marks a major step towards achieving a much-needed compromise to end the impasse, according to an AFP report.

Specifically, the European Commission President’s spokesman, Margaritis Schinas, told the press that  Jean-Claude Juncker “sees in this letter a positive sign, which could pave the way for a reasonable compromise in the interest of financial stability in the euro area as a whole.”

 

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Background: 

A request for the six-month extension of Greece’s loan agreement with its European partners was submitted on Thursday morning in Brussels by the Greek government in order to secure a “protective umbrella for Greece’s financial system.”

The request clarified that the government asks for an extension of the loan agreement and not the entire previous bailout agreement (memorandum), which the ruling party has vowed to scrap.

The request has been received by Eurogroup chairman Jeroen Dijsselbloem, as he himself announced via a tweet. Shortly after, the Dutch Finance Minister announced the convening of a Eurogroup meeting on Friday at 14:00 (GMT) in Brussels with the participation of Greek FinMin Yanis Varoufakis.