Time’s running out but Greece is not bending to EU’s ultimatums

(Reuters) – European Union finance ministers wielded enticements and veiled threats on Tuesday to press Greece to stay in an international bailout as financial markets slipped on fears of disruption if Athens’ credit lines expire in 10 days time.

However, the euro recovered from a dip that followed the acrimonious breakdown of talks on Monday night, as investors took the view that both sides would climb back from the brink.

If there is no deal on further financing this month, Greece could face a bank meltdown and run out of money as early as March, possibly becoming the first country to leave the euro zone or issue a parallel currency.

French Finance Minister Michel Sapin aired a compromise plan to let Greece run a smaller budget surplus and said reaching a deal was largely a matter of phraseology, since there was consensus that there would be no write-off of Greek debt.

“It’s a problem of wording, although the legal tool cannot be anything else than an extension of the (bailout) program,” he told reporters.

Greek Finance Minister Yanis Varoufakis, who stayed in Brussels for a routine EU finance ministers’ meeting on other issues, dismissed the argument that his only option was to ask them to extend a bailout his government was elected to scrap.

“We will continue to deliberate, in order to enhance the chances and actually achieve a very good outcome for the average European,” Varoufakis said, pledging an “honorable solution”.

Deputy foreign minister Nikos Chountis voiced “cautious optimism”. But with impatience between seasoned Eurocrats and the radical novices from Athens mounting, he slammed the EU for sticking to its key demand: “We don’t accept blackmail proposals, ultimatums about extending the bailout.”

Jeroen Dijsselbloem, the Dutch finance minister who chairs the Eurogroup of 19 countries using the common currency, stuck to his guns, saying Athens must seek an extension: “It’s really up to the Greeks. We cannot make them or ask them. We stand ready to work with them, also (over) the next couple of days.”