BRUSSELS — European creditors on Monday issued Greece an end-of-week deadline to request an extension to its bailout program or face having to meet its debt commitments on its own.
After the 19 finance ministers of the eurozone failed to find common ground on the Greek government's ambition to ease the burden of austerity, investors grew increasingly concerned that a compromise deal was not in the offing. The euro fell sharply as the talks broke down.
Yet despite the talk of deadlines, Greece's finance minister, Yanis Varoufakis, insisted a deal between the two sides would be signed soon and that visible progress will be made within the next 48 hours.
"We are ready and willing to do whatever it takes to reach an agreement over the next two days," he said. "Europe will do the usual trick: It will pull a good agreement or an honorable agreement out of what seems to be an impasse."
Greece's current bailout program ends after Feb. 28, but it's still not able to stand on its own two feet if it's to meet its financial obligations over the coming few months. Without further support, Greece faces renewed risk of bankruptcy and a potential exit from the euro.
The discussions between Greece's radical-left Syriza government, which has been in power for around three weeks, and the eurozone were about what happens at the start of March. Both sides have indicated that they are willing to compromise but have yet to agree to a form of words that would allow some breathing space.
A cornerstone of Syriza's election victory was there would be no extension. In return for billions of rescue money, successive governments have had to impose a series of economic reforms and spending cuts, which the Greek government blames in large part for the country's ills — Greece's economy has shrunk by a quarter over the past few years while unemployment and poverty rates have swelled dramatically.
"It would be an act of subterfuge to promise we will complete a program we were elected to challenge," said Varoufakis.
Jeroen Dijsselbloem, the head of the so-called eurogroup, said the program should be extended to get more time to agree on a lasting solution. "My strong preference still is to get an extension of the program, and I think it is still feasible," he told a press conference after the talks ended.
"The request for an extension only commits to one thing: that you keep to the broad lines of the program," said Dijsselbloem who said another meeting could take place Friday.
He said there was "some flexibility" already in the bailout program, a turn of phrase that Varoufakis described as "nebulous" and lacking in detail.
Malta's finance minister, Edward Scicluna, worried about the implications of a failure by Athens to request an extension: "Then we won't meet. There won't be anything. It will be a disaster."