Greece intends to reject bailout extension

Despite pressure from eurozone officials to agree to a further extension to the existing bailout, the Greek government insisted Friday that it would not accept its partners’ offer but would instead propose the terms of a bridging agreement to see it through the next few months.

An extra Eurogroup meeting is due on Wednesday, when Finance Minister Yanis Varoufakis will set out to Greece’s partners how the government envisages covering its funding needs over the next few months until a more comprehensive agreement between all parties is reached.

Government sources were adamant Friday that Greece would not accept the outstanding 7.2-billion-euro bailout tranche, which would require the SYRIZA-led coalition to complete a set of structural reforms.

Athens’s plan is based around being given permission to issue more treasury bills after reaching the 15-billion-euro limit it had agreed with the troika. It also wants to receive 1.9 billion euros from profits the European Central Bank made as part of its SMP program, which involved purchasing Greek bonds on the secondary market. This 1.9 billion is included in the 7.2-billion-euro installment.

The indications from Brussels Friday were that eurozone officials would not accept these proposals. It is thought that Varoufakis will present a commitment by the new Greek government not to take any unilateral action while the bridging deal is in place, to commit to fiscal targets and structural reforms proposed by Athens.

Varoufakis held a lengthy meeting Friday with Prime Minister Alexis Tsipras and Deputy Prime Minister Yiannis Dragasakis.

Tsipras is due to present his government’s policy program in Parliament Sunday and sources suggested that he would be careful not to commit to measures that might antagonize Greece’s lenders.

On privatizations, Tsipras is likely to make it clear that the coalition will not challenge sell-offs that have been completed unless there is a legal reason to do so but will review any deals that are in the pipeline.

With respect to the welfare measures that SYRIZA has proposed, such as providing free electricity for poor families, Tsipras will likely move ahead with them but balance their cost against savings in other areas.