“There won’t be a meeting where we have to listen to how the world is working,” Austrian Finance Minister Hans Joerg Schelling said in an interview Tuesday. “There will be a meeting only where it’s clear, the letter is there, the request is there, the conditions are confirmed.”

Tsipras said in an interview with Germany’s Stern magazine published Tuesday that Greece’s existing program is “dead” and that he rejects the deadline set by the euro area.

The currency region’s negotiations in Brussels ended abruptly on Monday evening when Greek Finance Minister Yanis Varoufakis refused to bow to European demands. Varoufakis said he wants an interim deal that acknowledges Greece is going renegotiate the terms of the current bailout rather than locking it in to an economic program he’s labeled a “humanitarian disaster.”

“We know in Europe how to deliberate in such a way as to create a very good solution, an honorable solution, out of initial disagreements,” Varoufakis said Tuesday morning. “Europe will continue to deliberate in order to enhance the chances to achieve a very good outcome for the average European.”

David Fuller's view

Germany will provide most of the funds for a loan extension but it is not going to write off debts agreed by Greece’s previous government.  Greece is in a humiliating position because it has yet to figure out how it can compete with more advanced economies.  It is easy to sympathise with Greece, the plucky underdog which is trying to bluff its way out of economic depression, preferably by holding out for debt forgiveness.  That would be an expensive precedent. 

Greece might just be able to gain an extension of its loan agreement.  However, its brash, populist and inexperienced government has also generated more ill will than camaraderie among the EU’s governing ministers.  Reviving historic enmities was unhelpful and distasteful, not least as the EU’s noblest goal was to prevent them from ever reoccurring.   

More seriously, I find it hard to believe that loan extensions will do any more than buy Greece a little more time before the economic frustrations rise once again.  I say this not because Greeks are incapable; far from it. In fact, they still have a large and legendarily successful shipping industry.  Greek shipping tycoons have supported Greece with ambitious development programmes in the past but appear reluctant to do so again, apparently because of governance problems.  See: Aegean Blues: A look at the financial crisis in Greece, including how the shipping industry could impact the country’s future, from Town & Country.  This excellent article was written in mid-2013 but is probably just as relevant today.

Looking beyond ‘Grexit’ or not, any short-term agreement with Greece would shift investor attention back to the certainty of Mario Draghi’s QE of €60bn per month, commencing in March.  This is very likely to revive interest in many of the EU’s stock markets.