Germany rejects Greek loan request

wolfgangGermany has rejected a Greek request for a six-month extension to its eurozone loan programme.

The rejection came despite the European Commission calling the Greek request “positive” only minutes earlier.

Greece had sought a new six-month assistance package, rather than a renewal of the existing deal that comes with tough austerity conditions.

However, a German finance ministry spokesman said the new plea was “not a substantial proposal for a solution”.

Later yesterday, Greek Prime minister Alexis Tsipras and German Chancellor Angela Merkel spoke by telephone, according to the Reuters news agency.

One Greek government official described the 50-minute call as “constructive”, adding: “The conversation was held in a positive climate, geared towards finding a mutually beneficial solution for Greece and the eurozone.”

Meanwhile, Italian Prime minister Matteo Renzi spoke to Mr Tsipras and European Commission President Jean-Claude Juncker in a further effort to strike a deal, an Italian government source said, according to Reuters.

Greece formally requested a six-month extension to its eurozone loan agreement yesterday, offering major concessions as it raced to avoid running out of cash within weeks, but the German finance ministry abruptly dismissed the proposal.

The BBC’s Mark Lowen in Athens says Germany’s rejection of the Greek proposal suggested “a rift between Brussels and Berlin at the very highest level”.

“It’s not yet clear which side will prevail, and which side will give ground, but clearly the hopes that Greece was moving towards a deal… have been thrown into doubt once again.”

BBC Europe editor Gavin Hewitt says the situation underlines the tension between Brussels and Berlin and mistrust between Berlin and Athens.

A top European official said the stand-off had come down to a clash of personalities between German Finance Minister Wolfgang Schaeuble, who objected to the negotiating style of his Greek counterpart, Yanis Varoufakis.

“There is a real problem of personalities and I understand that. Schaeuble is outraged by comments made by Varoufakis,” the official said.

–BBC

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