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| Stock markets down as Greece debt talks falter | Stock markets down as Greece debt talks falter |
| (about 2 hours later) | |
| European stock markets have lost ground as eurozone finance ministers continue to put pressure on Greece's private creditors to accept a lower interest rate on their loans to Athens. | European stock markets have lost ground as eurozone finance ministers continue to put pressure on Greece's private creditors to accept a lower interest rate on their loans to Athens. |
| UK, French and German share indexes had fallen 1% by mid-afternoon trading. | |
| Late on Monday, ministers said creditors must accept a lower rate than the 4% they had offered and called on both parties to reach a deal this week. | Late on Monday, ministers said creditors must accept a lower rate than the 4% they had offered and called on both parties to reach a deal this week. |
| A deal is necessary for Greece to receive the bailout funds it needs. | A deal is necessary for Greece to receive the bailout funds it needs. |
| Without the funds, Athens will not be able to make billions of euros of loan repayments due in March. | Without the funds, Athens will not be able to make billions of euros of loan repayments due in March. |
| Ministers confirmed that 130bn euros ($169bn; £108bn) was available for the country, but also called on Greece to accelerate structural reforms to strengthen its economy before funds would be released. | Ministers confirmed that 130bn euros ($169bn; £108bn) was available for the country, but also called on Greece to accelerate structural reforms to strengthen its economy before funds would be released. |
| Separately, figures suggested that private sector activity in the eurozone grew for the first time in five months in January. | Separately, figures suggested that private sector activity in the eurozone grew for the first time in five months in January. |
| Initial estimates from the closely-watched Markit PMI survey gave a reading of 50.4, up from 48.3 in December. Any number above 50 suggests growth. | Initial estimates from the closely-watched Markit PMI survey gave a reading of 50.4, up from 48.3 in December. Any number above 50 suggests growth. |
| Lower rates | Lower rates |
| The finance ministers, headed by Luxembourg's Prime Minister Jean-Claude Juncker, said they welcomed progress made in the talks between Athens and its private creditors, but called for an agreement "in the next few days". | The finance ministers, headed by Luxembourg's Prime Minister Jean-Claude Juncker, said they welcomed progress made in the talks between Athens and its private creditors, but called for an agreement "in the next few days". |
| Mr Juncker also made clear that ministers backed Greece over the rate of interest it should pay on new bonds that will replace existing bonds held by creditors. | Mr Juncker also made clear that ministers backed Greece over the rate of interest it should pay on new bonds that will replace existing bonds held by creditors. |
| "Ministers asked their Greek colleagues to pursue negotiations to bring the interest rates on the new bonds to below 4%, which implies the interest comes down to well below 3.5%," he said. | "Ministers asked their Greek colleagues to pursue negotiations to bring the interest rates on the new bonds to below 4%, which implies the interest comes down to well below 3.5%," he said. |
| Private creditors have, so far, refused to go below 4%. | Private creditors have, so far, refused to go below 4%. |
| "The goal is to reduce [Greece's] debt from 160% of GDP now to about 120% by the end of the decade," said the BBC's Europe correspondent, Chris Morris. | "The goal is to reduce [Greece's] debt from 160% of GDP now to about 120% by the end of the decade," said the BBC's Europe correspondent, Chris Morris. |
| "The current offer, which representatives of the banks had suggested was final, would not achieve that goal." | "The current offer, which representatives of the banks had suggested was final, would not achieve that goal." |
| Ministers reiterated that a deal with private creditors was essential for the European Commission, European Central Bank and International Monetary Fund to release further bailout funds. | Ministers reiterated that a deal with private creditors was essential for the European Commission, European Central Bank and International Monetary Fund to release further bailout funds. |
| "Greece and the banks have to do more in order to reach a sustainable debt level," said Dutch Finance Minister Jan Kees de Jager. | "Greece and the banks have to do more in order to reach a sustainable debt level," said Dutch Finance Minister Jan Kees de Jager. |
| "And we have to await the discussions about that because a sustainable debt level is absolutely a precondition for the next programme [of bailout funds]." | "And we have to await the discussions about that because a sustainable debt level is absolutely a precondition for the next programme [of bailout funds]." |
| Debt deadline | Debt deadline |
| The finance ministers said they expected Greece's creditors to accept a nominal 50% cut to the value of the loans they have made to Greece. | The finance ministers said they expected Greece's creditors to accept a nominal 50% cut to the value of the loans they have made to Greece. |
| The Institute of International Finance (IIF), which represents Greece's private sector creditors, said a technical team would continue to work further on the details of an agreement. | The Institute of International Finance (IIF), which represents Greece's private sector creditors, said a technical team would continue to work further on the details of an agreement. |
| European leaders agreed in principle last year that private lenders would voluntarily write off 50% of their loans to Greece, but private creditors still need to agree the precise terms of the deal. | European leaders agreed in principle last year that private lenders would voluntarily write off 50% of their loans to Greece, but private creditors still need to agree the precise terms of the deal. |
| The 130bn euro rescue package is crucial if Greece is to meet its next debt repayment deadline. | The 130bn euro rescue package is crucial if Greece is to meet its next debt repayment deadline. |
| Without the bailout, Greece would not be able to pay back 14.5bn euros of maturing bonds in March. | Without the bailout, Greece would not be able to pay back 14.5bn euros of maturing bonds in March. |