After weeks of tension between the Greek government and Europe, Greece is set to apply for an extension of its loan agreement, in an effort to overcome the deadlock. Finance Minister Yanis Varoufakis commented on Wednesday that the application would cover both Greece and the Eurogroup.
How this application for an extension will be worded though, has turned out to be rather problematic. The official term used for the loan agreement between the EFSF, HFSF, the Greek government and the Bank of Greece is “Master Financial Assistance Facility Agreement”, however rumors suggest that the government will request an extension of the “Master Financial Assistance Facility of Greece”, rather than a loan agreement or bailout program
The problem, according to sources from Brussels, is located in the terms and conditionality. A European Commission officer told To Vima that the terms used in the application must be agreeable by both sides, otherwise there is no agreement. Essentially the negotiation is one of terminology. The same EC officer also noted that references to unilateral actions may cause greater tension.
With both sides seemingly unable to agree upon the fullest extent of the terms used in the application, the Commission seems geared towards agreeing to replace certain measures of the existing agreement with other, equal measures. This process however will also require time and exhaustive discussions.
