German Chancellor Angela Merkel called for calm after a euro-area finance ministers' meeting on Greece descended into acrimony and name-calling.
Finance chiefs meeting in Riga, Latvia, on Friday, let loose at Yanis Varoufakis, their Greek counterpart, as they ruled out making a partial aid payment in exchange for a narrower program of reforms.
“It's important that we show understanding for each other,” Merkel told a crowd at a campaign event in Bremerhaven, Germany. While all sides are working toward a deal, “we don't know if this will work out,” she said.
Attention now returns to Athens where the cash-strapped government needs to pay pensions and salaries to civil servants before the end of the month. In the first week of May, the European Central Bank will discuss whether it needs to tighten the rules on emergency funding to Greek banks, and a loan from the International Monetary Fund of about 201 million euros (US$218 million) comes due.
During Friday's meeting finance ministers said Varoufakis's handling of the negotiations over revamping the Greek economy in return for bailout cash was irresponsible. They accused him of being a time-waster, a gambler, and an amateur, a person familiar with the conversations said, asking not to be named because the discussions were private.
“It was a very critical discussion, and it showed a great sense of urgency around the room,” Jeroen Dijsselbloem, the Dutch chairman of the Eurozone finance ministers' group, said at a press conference after the meeting. Asked if there was any chance of a partial disbursement, he said, “The answer can be very short: No.”
European Central Bank (ECB) President Mario Draghi added to the pressure on the Greeks, warning that policy makers may review the conditions of the emergency funding keeping the country's banks afloat.
Euro-area governors will “carefully monitor” the haircuts imposed on Greek banks' collateral when borrowing from the Bank of Greece, Draghi said, to take into account the “change in the environment.” The Governing Council is due to discuss the matter on May 6, according to two people with knowledge of the talks.
One of the 19-nation euro area's finance ministers urged the bloc to consider drawing up a “plan B” in case the negotiations collapse, three people with knowledge of the talks said. The person asked not to be named as the discussion was private.
“There is no plan B; there must not be a plan B,” European Economic Commissioner Pierre Moscovici said in an interview with Bloomberg. “Everybody here is working for the same purpose, which is Greece staying in the Eurozone.”
– With assistance from Patrick Donahue in Berlin, Richard Bravo, Ben Sills, Jeff Black, Jim Brunsden, Corina Ruhe, Zoe Schneeweiss, Alessandro Speciale, Karl Stagno Navarra, Jonathan Stearns, Rainer Buergin, and Patrick Henry in Riga, and Ben Moshinsky in London.
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