Eurozone finance ministers in Brussels have failed to reach agreement on releasing the latest tranche of bailout funds for Greece. No conclusion was reached after 12 hours of talks due to a divergence of opinion between the eurozone and the International Monetary Fund on how to manage Greece's debt level in the long term. A further meeting has been scheduled for Monday. The latest attempt to square the Greek debt circle may have brought a solution closer, but the failure to reach a deal for the second week in a row will bring more unwelcome uncertainty to the eurozone. The euro has fallen against the dollar in early trading. At issue is how to manage Greece's debt pile in the longterm. The IMF is adamant that the country should have lowered its debt to 120% of its GDP within eight years, but for that to happen eurozone governments will almost certainly have to write off some the tens of billions they have already loaned to Greece. Since that is politically a non-runner, finance ministers would prefer Greece to meet the target two years later, in 2022. To bridge the gap, options are being explored, such as further lowering the interest rates Greece pays, and a scheme whereby Greece would buy back bonds held by investors at around 30% of their face value. But the stark facts remain that due to the country's six year long recession, and the failure of privatisation to raise the sums hoped for, the debt level will remain stubbornly high and well off track.

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