Greece and its creditors will likely be forced to enter another series of discussions surrounding the bailout program after Germany denied a six-month extension of its loan agreement on Feb. 18.
Greece currently has a loan agreement with the European Commission, the European Central Bank and the International Monetary Fund.
Greece’s finance minister, Yanis Varoufakis, issued a two-page letter to Eurogroup ministers of the eurozone explaining the necessity of the six-month extension. The extension was proposed in the hopes of avoiding a cash crisis when Greece’s current loan agreement expires at the end of February.
The Eurogroup has scheduled a meeting in Brussels on Feb. 19 where Greece’s bailout proposal will be discussed.
Greece would require unanimous approval from all 19 eurozone ministers to secure a deal. However, unless Greece revises its proposal before the meeting, approval will be difficult to obtain.
A spokesman for the German Finance Ministry, Martin Jäger, released a statement arguing that Varoufakis’ proposal was not one that would solve matters.
Germany is the eurozone’s most lucrative economy, and is a pivotal decision maker within the Eurogroup.
Jäger argues that Greece’s proposed extension violates the bailout program criteria agreed upon by ministers at the Eurogroup meeting on Feb. 16.
Germany’s position could push Greece towards exiting the eurozone; however, critics suggest that Germany is simply being tactical. Rejecting the bailout program extension will give the Eurogroup the flexibility to enforce further bailout requirements.
Greece has until Feb. 19 to come to an agreement with its creditors or it will be cut off from receiving further loans.
Greece’s loans currently total 240 billion euros.
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Video credit: Euronews