Greek crisis meeting gets go-ahead despite German challenge

Another showdown between the Eurogroup and Greece over the country's bailout was given the green light today, after Greek finance minister Yanis Varoufakis sought a six-month extension.

Eurozone finance ministers will meet at 3pm local time on Friday, the second such meeting in the space of a week, Eurogroup president Jeroen Dijsselbloem confirmed today.

If a deal can be reached, European legislatures will have just a week to implement the changes before Greece's current programme expires on February 28.

After talks collapsed on Monday, Dijsselbloem said Greece would have to ask for an extension of its bailout for a further meeting to be agreed. On Wednesday, Varoufakis sent Dijsselbloem a letter setting out a compromise and seeking a further six-month extension to the bailout, a copy of which was leaked to the press today.

The letter carefully avoids the use of the word "programme", politically toxic in Greece, instead referring to an extension of the "Master Financial Assistance Facility Agreement", the loans agreed under the European Financial Stability Fund (EFSF).

The key sticking point, however, is to what extent Greece will comply with the austerity measures the EFSF agreement is contingent upon. The measures were agreed upon by the previous Greek government but rejected by the newly elected Syriza party.

The Greek government now appears to have at least partially backed down. The letter said: "we recognise as binding" the agreement's "financial and procedural content".

Nevertheless, the German finance ministry was quick to dismiss Varoufakis's proposals. In a statement, a spokesman for the ministry said the terms of the letter were not a "substantial solution" but rather a bridging loan, and did not meet the criteria agreed at the Eurogroup meeting on Monday.

That 'agreement' on Monday was, of course, rejected by Varoufakis, who walked away from the negotiating table.

Varoufakis's letter yesterday was more conciliatory. He stressed Greece was willing to co-operate with its partners and would honour its debts. But he also said the six-month extension would be used for further negotiations, "to agree the mutually acceptable financial and administrative terms the implementation of which, in collaboration with the institutions, will stabilise Greece's fiscal position, attain appropriate primary fiscal surpluses, guarantee debt stability and assist in the attainment of fiscal targets for 2015 that take into account the present economic situation."

The letter left open the question of what terms exactly Greece would be willing to accept on Friday, and the German finance ministry's Twitter account implied its statement was just a "first impression", so there may still be room for negotiation.