More cuts

The Greek drama is set to continue as the government in Athens dragged its feet over a new austerity package, reaching a last-minute deal just hours before the Brussels summit on Thursday .

Upon his arrival in Brussels, Greek Finance Minister Evangelos Venizelos was confident that his country had found a deal "for a new, strong and credible program." He said that now the ball was in the court of the eurozone for giving the green light.

Athens' austerity plan centers on cutting the minimum wage and firing some 15,000 civil servants. Yet for the eurozone finance ministers gathered in Brussels, this was not enough.

Ahead of the talks, German Finance Minister Wolfgang Schäuble had already warned that "while the negotiations have made progress, we're not quite there yet."

After hours of talks, it was only around midnight that Eurogroup chief Jean-Claude Juncker addressed the press, confirming Schäuble's concerns.

Three key demands

"Despite the important progress achieved over the last days, we did not yet have all necessary elements on the table to take decisions today," Juncker said, adding that a new eurozone meeting would be held next Wednesday to re-examine whether Greece had met all the conditions for the next part of the bailout.

The eurozone ministers have three demands: the Greek parliament has to pass the austerity package by Sunday. Also, another 325 million euros ($439 million) need to be cut and last but not least, the ministers want written guarantees that the austerity measures will be implemented even after the elections of a new government in April.

"These three elements that I mentioned need to be in place before we can take decisions," Juncker said.

Growing frustration

Austrian Finance Minister Maria Fekter said the drawn-out negotiations cost the eurozone a lot of patience. "We had suggested such ambitious cuts already last year, but it seems that Greece found it hard to implement those measures." Fekter's comments echo a growing frustration in the eurozone over Athens' slow pace of reform over the past months.

As a consequence, there's backing for a Franco-German plan to better monitor the reform efforts, forcing Greece to set up a separate account dedicated to repaying its debt.

EU Economic Affairs Commissioner Olli Rehn called the proposal a "possibility for reinforcing surveillance and effectively implementing the program," despite strong criticism from Athens. Most Greeks see a separate account as proposed by Berlin and Paris as an inacceptable intrusion into the fiscal affairs of a sovereign state.

Without the new eurozone bailout, Greece will be unable to meet upcoming bond payments of 14.5 billions euros on March 20 and effectively go bankrupt.

Role of the ECB

Negotiations with private investors have also not been concluded yet. The goal is that banks, insurers and funds would agree to slice some 100 billion euros off the country's debt load. It's unclear whether this deal will be successful - if not, it could again be the eurozone taxpayers who would have to rush to the rescue.

European Central Bank chief Mario Draghi on Thursday dismissed speculations that the ECB might be drafted in to help Greece. Officially, the bank is not allowed to directly help financing a eurozone member state in trouble. But Draghi hinted the central bank could provide indirect help without breaching a treaty ban on financing governments.

Draghi also warned the finance ministers in Brussels that he thought there was in fact too much of a focus on financial help. What was most important, he said, were "reforms within the countries." This is what the eurozone should concentrate on first, he added, and only later start thinking about financial aid.

But the protests against further and further cuts and austerity measures are growing. In Greece, unions have called for fresh strikes of Friday and Saturday.

Author: Christoph Hasselbach, Brussels / ai
Editor: Spencer Kimball