Top Stories
Top Stories
World Economy

Merkel keeps up the heat on Greece

Peter Spiegel and Stefan Wagstyl

Angela Merkel, German chancellor, reiterated her government's options for a fiscal rescue, saying Athens could either complete all the requirements of its €172 billion ($196 billion) bailout by the end of the month or request an extension of the program beyond its February 28 expiry.

Ms Merkel's stance, her first public comments on the intensifying Greek stand-off after meeting the country's new prime minister Alexis Tsipras at Thursday's EU summit in Brussels, continued to shut off Mr Tsipras' preferred path: a new, revised bailout agreement with less austerity demands than the current program.

It also raised the stakes ahead of a critical meeting of eurozone finance ministers on Monday, a self-imposed deadline for Athens to either ask for a program extension or find itself without a fiscal backstop for the first time since the eurozone crisis started in May 2010.

Jasper Juinen | Bloomberg | Getty Images

"Europe always aims to find a compromise, and that is the success of Europe. Germany is ready for that," said Ms Merkel. "However, it must also be said that Europe's credibility naturally depends on us respecting rules and being reliable with each other."

In a sign the two sides were making , Mr Tsipras and Jeroen Dijsselbloem, the Dutch finance minister who chairs the committee of his 18 counterparts, agreed to start technical negotiations between Athens and its international creditors on a way forward.

More from the Financial Times:
How Greek compromise on bailout unraveled
How much would a third Greek bailout cost?
ECB extends €5bn loans to Greek banks

The agreement, which came at a meeting between the two men before the EU summit, repaired some of the damage of a finance ministers' meeting on Wednesday night when talks broke down amid recriminations after the two sides failed even to agree on when the next negotiations would take place.

At a post-summit news conference, Mr Tsipras said the technical negotiations — which will begin on Friday between Greece, the European Commission, the European Central Bank and the International Monetary Fund — would "go on so a mutually acceptable solution can be found".

Why Europe could relent on Greek debt

But Mr Dijsselbloem struck a cautious note, saying that, while it may be possible to begin the technical work of determining which parts of the current bailout the Tsipras government would agree to continue and which reforms it seeks to scrap, reaching a political agreement on Monday would be more difficult.

"I am very cautious on the political side," Mr Dijsselbloem said. "It is going to be very difficult. It is going to take time. Don't get your hopes up yet."

Mr Tsipras, who has repeatedly insisted he would not allow the current bailout to continue, called efforts to pressure Athens into accepting the commitments of the current bailout a "scare campaign". He noted that none of the dire predictions of his critics have come true.

Read MoreWould forgiving Greece's debt really be that bad?

"In the last days, we listened about scenarios about a Greece bankruptcy if Greece wouldn't accept an extension of the bailout program," Mr Tsipras said. "But no devastation, no catastrophe occurred, as you can see."

Although the Greek bailout runs through to the end of the month, Mr Tsipras must request an extension by Monday or else there will not be enough time for eurozone parliaments to approve the deal.

"There's not much time because there are rules in certain countries whereby if the programme is changed or extended whatever the words, parliament needs to vote on it," said François Hollande, French president. "The Greek government is conscious of that."