Negotiations are underway between Greece and their international creditors with a last minute Eurogroup meeting scheduled for late Friday afternoon in Brussels after the latest 6 month loan extension proposal on Thursday from Athens failed to go far enough to meet key demands from Germany and other Eurogroup finance ministers who are still hoping to extend Greece’s bailout and keep the indebted country from defaulting on their bailout rescue loans.
The German government criticized the latest 6 month proposal from Athens as a “Trojan horse” designed to dodge its commitments.
“The letter from Athens is not a substantive proposal for a solution. In truth, it aims at bridge financing without fulfilling the demands of the programme” Martin Jager, spokesman for the German ministry said on Thursday after reviewing the latest Athens proposal.
Greece’s €240 billion bailout package expires on February 28th.
Athens could run out of cash as early as March unless a new bailout is obtained.
Greece is faced with a surge in debt repayments in 2015.
Greek Finance Minister Varoufakis has attempted to free Greece from renewing many of the fiscal austerity reforms that exist in its bailout current package but remain deeply unpopular in Greece.
Varoufakis has even referred to the current bailout for Greece as “financial waterboarding” and drew comparisons in the past between Greece’s bailout creditors and the mafia.
After reviewing Athens’ latest 6 month loan bailout proposal on Thursday that falls short of Greece’s current bailout plan, loaded with austerity measures, Berlin officials have considered taking back €10.9 billion in bailout funds used in Greece’s bank bailout facility that will likely be needed if banking institutions continue to weaken.
Deposit outflows in Greece’s banks have increased to over €1 billion during the past 2 days as Greeks are concerned about capital controls being imposed.
Eurogroup officials have said that they believe some of the main differences that divide Athens from its bailout creditors could still be reconciled before February 28th.
Eurogroup Finance Chair Jeroen Dijsselbloem has been working to smooth over some of the key differences that separates Athens from its international creditors. Today’s Eurogroup meeting is scheduled for 1400 GMT in Brussels.
The latest Athens proposal still honors debt obligations and places Athens under supervision from bailout lenders and the European Central Bank.
* Correction-the post from yesterday incorrectly listed the Eurogroup as occurring on Thursday instead of Friday