Finance ministers set to scrutinise Greek debt plan

Eurozone finance ministers will get their first look at Greece’s plan for a new deal tomorrow but will refuse to negotiate just yet.

Instead they will meet again next Monday when all cards will be on the table and they will try to reach a deal that could spell either exit for Greece from the eurozone or a watering down of the austerity that has brought the country to its knees.

Ireland is waiting to see the details to decide whether to support it. It has said it will look for anything the Greeks get that may benefit Ireland.

According to the Greek Finance Minister Yanis Varoufakis his plan will include a New Deal for Europe, called after the US post-war plan, that would see the European Investment Bank increasing by 10 times its funds to member states.

They appear to have the support of Italy’s prime minister Matteo Renzi and fellow Social Democrat Austrian chancellor, Werner Faymann who over the weekend criticised Germany’s failure to move ahead with growth measures to combat unemployment. However, all agree that the Greek debt will have to remain on the books, even if repayment is pushed out decades.

EU leaders meeting on Thursday are expected to keep out of the negotiations at least for now and instead will be briefed on the Greek demands by eurogroup president Jeroen Dijsselbloem. Finance Minister Michael Noonan and Taoiseach Enda Kenny have been avoiding publically saying whether they will support Greek demands, but Agriculture Minister Simon Coveney has made it clear that Ireland will be looking for any deal given to Athens.

“All the eurozone countries are working very hard at keeping cohesion between them to strengthen their hand during the coming negotiations,” said an Irish source.

But all are afraid that their game of poker might backfire and unexpectedly cause a run on Greek banks or cause a default. “Italian and Spanish bonds have widened because of the current uncertainty — so of course these countries are very worried also,” said a Spanish source.

Eurozone officials are nervous that the Greek government just weeks in power could precipitate an early collapse of negotiations.

Over the weekend they sent to Athens their two most senior people dealing with Greece, who to all intents and purposes call the shots in the eurozone on Greece. They are the Commission’s Declan Costello from Galway and Thomas Wieser who chairs the euro working group. The group is made up of senior people from each euro country’s department of finance.

The Greek finance minister is expected to look for three-month bridging finance to give it time to negotiate on a new plan that would allow it end or reverse many of the austerity measures.