Greece confirms it will ask for loan extension

Thousands of Greek protesters demonstrated in Athens last week in support of their government’s anti-austerity approach at the EU [Xinhua]

Greek officials have said Athens will continue to reject an extension of a $300 bailout plan with the Eurozone, but is ready to ask for a six-month continued loan agreement.

The loan agreement falls outside of the bailout provisions and most importantly does not require the type of austerity measures that the new leftist government says has crippled Greece.

Greek Finance Minister Yanis Varoufakis has told German media that the loan would provide Greece with the financial stability it needed to renegotiate more favorable bailout conditions with the European Central Bank (ECB).

During a meeting with European finance ministers on Monday, Varoufakis said his government renewed its rejection of the current $300-billion bailout regimen, which terminates if not renewed by February 28.

European financiers fear time is running out, and with both sides holding their ground about Greece’s cash flow problem, there are concerns Athens could run out of money.

Later today, the ECB’s governing council will meet to seek solutions that could continue to provide Greece with loan assistance.

Austerity discontent

Varoufakis is part of the new leftist government that was swept to power in snap elections last month largely riding a wave of popular discontent against the austerity measures that were set as preconditions for the bailout agreement with the EU since 2009.

Greek Prime Minister Alexis Tsipras has vowed renegotiate the terms of the agreement.

While addressing parliament last week, he said that Greece wants a fiscal space to be able to renegotiate a restructuring of its debt with European partners.

“We know very well that talks won’t be easy and that we are facing an uphill path but we believe in our abilities,” he told members of parliament.

“The more our partners want austerity, the more the problem with the debt will get worse,“ he added.

Tsipras says he will raise minimum wages, cut taxes, and rehire public workers fired when the ECB and IMF imposed a cap of 150,000.

The current standoff, meanwhile, has added to the euro currency’s woes – it fell to a new seven-year low of just under 1.136 before rising slightly in afternoon European trading.

The BRICS POST with inputs from Agencies.