By Renee Maltezou and Jan Strupczewski
BRUSSELS, Feb 16 (Reuters) – Talks between Greece and euro zone finance ministers over the country’s debt broke down on Monday when Athens rejected a proposal to request a six-month extension of its international bailout and stick to the conditions.
The unexpectedly rapid collapse raised doubts about Greece’s future in the single currency area after a new leftist-led government vowed to scrap the 240 billion euro bailout, reverse austerity policies and end cooperation with EU/IMF inspectors.
Dutch Finance Minister Jeroen Dijsselbloem, who chaired the meeting, said Athens had until Friday to request an extension, otherwise the bailout would expire at the end of the month.
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The ECB has allowed the Greek central bank to provide emergency lending to the banks, but a failure of the debt talks could mean the imposition of capital controls.
Euro zone member Cyprus was forced to close its banks for two weeks and introduce capital controls during a 2013 crisis. Such controls would need to be imposed when banks are closed. Greek banks are closed next Monday for a holiday.
Leftist Prime Minister Alexis Tsipras had requested a bridge program for a few months while a new debt relief deal is agreed to replace the existing bailout, which has already forced drastic cutbacks onto ordinary Greeks.
The current program expires at the end of the month. Some of the problem is semantic. The Greeks will not countenance anything that smacks of an “extension” to the old bailout or a continued role for the supervisory “troika” of international lenders. ($1 = 0.8785 euros) (Additional reporting by Yann Le Guernigou, Michael Nienaber, Andrew Callus, Ingrid Melander, Alastair Macdonald, Adrian Croft, Foo Yun Chee, Robin Emmott, Tom Koerkemeier and Francesca Landini; Writing by Jeremy Gaunt, Paul Taylor and Alastair Macdonald; Editing by Paul Taylor and Giles Elgood)
