Euro zone tells Greece new loan talks depend on vote result

By Alastair Macdonald BRUSSELS (Reuters) - Euro zone finance ministers piled pressure on Greek voters and their government on Wednesday by warning that negotiations on a new bailout would depend on the result of Sunday's referendum on previous EU credit terms. "We will come back to your request for financial stability support from the ESM (European Stability Mechanism) only after and on the basis of the outcome of the referendum," Jeroen Dijsselbloem, who chairs the Eurogroup, wrote to leftist Greek Prime Minister Alexis Tsipras, who is calling for a No vote. The implication is that loan terms -- commitments from Athens to tighten its budget and revamp its economy -- may be tougher in the event of a No to the creditors than a Yes. EU leaders have said this week that a No could jeopardise Greece's use of the euro, while a Yes would show support for the EU. The latter could, EU governments believe, end Tsipras's five months in power and provide them an easier negotiating partner. Dijsselbloem's one-page letter, published by EU officials, was sent in response to a request from Tsipras for a new loan which was briefly discussed by the Eurogroup in a conference call on Wednesday evening. Ministers agreed to hold no more discussions with Greece until after Sunday's vote. They spoke just after Tsipras condemned "blackmail" by creditors and called again for Greeks to vote "No" to a bailout extension that in fact expired on Tuesday. European leaders seem resigned, following Athens' default to the IMF and the expiry of the previous bailout package, to letting Greek politics run their course. Tsipras has said he will implement the will of the people, whatever the outcome, but many question whether he can survive if Greeks overturn current opinion polling and vote "Yes". In the meantime, Greece's euro zone partners see no point in talking further. "Let's not put the cart before the horse," tweeted Slovak Finance Minister Peter Kazimir. Several sources familiar with the hour-long conference call said there appeared to be no dissent from that view. Even French Finance Minister Michel Sapin, who had previously called for negotiations to continue this week, said that after Tsipras's latest speech there was no point in more discussions. GREEK PROPOSALS On Tuesday, hours before the expiry of the bailout, Tsipras had written to request an extension on terms similar to those offered by creditors last Friday but seeking important concessions, including a continued VAT discount on islands. Ministers have said the letter came too late for the bailout to be extended. Euro zone sources said Tsipras's letter was not discussed in detail on Wednesday but there was consensus that it did not satisfy creditors' demands for action to control the budget in return for further disbursements of funding. "At this point we simply took note of these proposals," Dijsselbloem said in a separate statement. Greek Finance Minister Yanis Varoufakis said the Eurogroup saw the proposals going "in the right direction". EU officials say negotiating positions reached in the failed process could be the basis for discussions to start on a new, third, bailout for Greece. They have said the euro zone is willing to consider Tsipras's request for a two-year loan and also to look at offering Greece some debt relief. But after Tsipras's latest fiery denunciations of his European partners to his home audience, patience is thin. "Greece has to draw up a realistic plan covering the actions needed to save the economy and to commit to implement it," said Finnish Finance Minister Alexander Stubb. "Unfortunately, this speech by Prime Minister Tsipras today did not increase our confidence in the Greek government's willingness to cooperate." (Reporting by Reuters bureaux; Editing by Peter Graff and Gareth Jones)