EU frustration over Greece hit boils at eurogroup meeting

Months of mounting frustration between Greece and its creditors boiled over at a high-level EU meeting on Friday with eurozone finance minsters angrily accusing their Greek counterpart of backtracking on commitments and failing to grasp the deep differences that still divide them.

The antagonism became so severe during the three-hour, closed-door session that Slovenia's finance minister suggested if talks over a financial bailout did not progress more quickly the eurozone should prepare a "Plan B" to deal with a Greek default.

According to three eurozone officials, other ministers from smaller, vulnerable economies expressed similar sentiments. The comment prompted a sharp rebuke from Yanis Varoufakis, the Greek finance minister, who accused his Slovenian counterpart of improperly raising the scenario and suggesting those who did were "anti-European".

The sharp exchange came at a eurogroup meeting originally intended to agree a new list of Greek reforms that Athens could then implement in order to gain access to the remaining €7.2bn in its bailout programme. But Jeroen Dijsselbloem, the Dutch minister who chairs the eurogroup, said "significantly more progress" was needed and warned "time is running out".

Athens is running desperately short of cash, and some eurozone officials fear that without an agreement to release the funds, the government could default as early as mid-May, when a €750m repayment to the International Monetary Fund comes due.

The contentious session undermined claims by Greek officials that a Thursday meeting in Brussels between Alexis Tsipras, the Greek prime minister, and Angela Merkel, his German counterpart, had narrowed differences. The claims briefly sent the euro rallying in morning trading, but those gains evaporated after news of the differences emerged.

Mr Dijsselbloem acknowledged the discussions had been contentious and suggested the negotiating process needed to be overhauled in order to speed up an agreement and avoid a Greek bankruptcy.

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Officials briefed on the private talks said Mr Dijsselbloem specifically requested a return to more in-depth evaluations by Athens-based bailout monitors - something staunchly resisted by the new Greek government.

While Mr Varoufakis said the government was "utterly undogmatic" about how to speed up the talks, he made clear a return to intrusive inspections by the so-called "troika", as the bailout monitors were formerly known, was unacceptable.

"The notion that everything would be resolved more quickly if we went back to the troika visits of yesteryear, that would solve our difficulties, from our perspective is simply groundless," he said.

Greek officials have expressed hope of either getting a quick disbursement of a portion of the €7.2bn in aid to meet immediate needs, or alternatively merging current talks into a larger third bailout that could take Athens through the summer, when the largest debt payments come due.

But Mr Dijsselbloem ruled out both possibilities, saying if the parties cannot agree on the issues at hand, other issues could not be broached. "It is clear it's very hard to talk about the future if you cannot agree on a period of four months," Mr Dijsselbloem said.

Meanwhile, Mario Draghi, the European Central Bank president, also suggested his governing council may need to review the value awarded Greek bonds when they are used by Greek banks as collateral to receive emergency central bank loans, the only cash currently keeping some of them functioning.

Mr Draghi said such emergency loans would continue as long as the banks are viewed as "solvent and have adequate collateral". But his remarks indicated the loans could become more costly to Greek banks.

Officials briefed on the talks said some of the most testy exchanges came over how much progress had been made in negotiations to release the funds. Mr Varoufakis in his opening remarks told his counterparts that he believed a deal could be reached quickly, suggesting a conference call could be held as soon as next week.

But other ministers expressed incredulity at the claims, and Mr Dijsselbloem suggested that even next month's meeting of finance ministers, scheduled for May 11, would only "take stock" of the situation rather than serve as a chance to reach a deal.

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