Germany and its allies turned up the pressure on Greece toaccept their conditions to stay in the euro as the region's topfinance officials descended on Brussels to hammer out a deal.

An agreement on extending Greece's bailout program, whichexpires at the end of February, appears unlikely, a European Unionofficial said. That would lead to more talks Sunday or Monday, theofficial said. A preliminary round was proving “very difficult,”Dutch Finance Minister Jeroen Dijsselbloem, who heads theEurogroup, told reporters.

Without aid, Prime Minister Alexis Tsipras's government inAthens risks running out of cash as early as next month. By bowingto German demands, the premier who promised to end austerity risksa domestic backlash.

“Germany, the Netherlands, and others will be hard, and theywill insist that Greece pays back the solidarity shown by themember states by respecting the conditions,” Malta's financeminister, Edward Scicluna, said in an interview. “They've nowreached a point where they will tell Greece, 'If you really want toleave, leave.'”

In a formal request on Thursday to extend the financial lifelinefor six months, Greek Finance Minister Yanis Varoufakis said hewould accept the financial and procedural conditions of theexisting deal while asking for negotiations on other elements.

Germany's Finance Ministry almost immediately rebuffed the latest Greek formula, saying thecountry needs to make a firmer commitment to austerity. Asubsequent conversation between Tsipras and German ChancellorAngela Merkel sparked investor optimism. Speaking in Paris Friday,she said “substantial improvements” are still needed to the Greekproposal.

Arriving in Brussels, the Dutch representative, Eric Wiebes,backed Schaeuble's approach.

“The Netherlands agrees with the Germans that the letter gaveinsufficient confirmation to get sufficient clarity the Greeks areprepared to fulfill all the conditions,” he told reporters. “Thissession must make clear whether the Greeks are prepared to fulfillall the conditions. When that's the case, an extension can ofcourse be discussed.”

Varoufakis urged his euro-area antagonists to cut Greece a breakafter four years of austerity. The Greek economy is about a quartersmaller than it was in 2009.

“We are expecting our partners to meet us not halfway butone-fifth of the way,” he said. “I have no doubts that there isgoing to be a very collegial discussion and, hopefully, at the endof this, we'll come out with some white smoke.”

Yields Fall

Investors are betting a potential financial calamity in the formof Greece being forced out of the euro will be avoided. Greek bondsrose for a third day, sending the yield on the three-year notesdown 26 basis points, to 16.8 percent, at 5:25 p.m. in Athens. Thatcompares with a record 128 percent in March 2012. The Athens StockExchange benchmark index slid 0.3 percent, paring initialgains.

“Hopes for a compromise at today's Eurogroup have been raised,”analysts including Nikos Koskoletos at Athens-based EurobankEquities wrote in a note to clients on Friday. “The key stumblingblock remains the clearer language regarding the conclusion of thecurrent program, as demanded by Greece's creditors, and moredetails regarding the attainment of fiscal targets.”

The Bloomberg Greece Sovereign Bond Index shows confidenceremains well above the worst levels of pessimism during the pastfive years. The index, a market-value weighted measure of Greece'sbonds, was at 90.89 at Thursday's close. That's more than fivetimes higher than the level reached in 2012.

The euro-area finance ministers, who were originally set toconvene at 3 p.m., had not gathered as of 4:30 p.m. They'll bejoined by European Central Bank (ECB) President Mario Draghi; ECBExecutive Board member Benoit Coeure; and Christine Lagarde,managing director of the International Monetary Fund.

–With assistance from Marcus Bensasson and Nikos Chrysoloras inAthens and James G. Neuger, Jonathan Stearns, Jeff Black, CorinaRuhe, Rainer Buergin and Radoslav Tomek in Brussels.

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