Tonio Fenech took part in the Eurozone meeting for finance ministers in Brussels earlier this week, as the group failed to agree on how to make private creditors contribute to a second possible Greek bail-out.

The finance ministers’ meeting took place ahead of next week’s EU summit, and as discussions continued late into the night on Tuesday, finance ministers looked at making private bondholders share the cost of a second rescue package without throwing financial markets into turmoil.

A Finance Ministry spokesman told this newspaper that “at this stage, there are no comments to make about the meeting. Discussions among the group have not been conclusive and will continue again with another EU group on Sunday evening and expected to last till Tuesday”.

Greek Prime Minister George Papandreou is seeking support for a new austerity programme of €28 billion in cuts to take effect from 2012 to 2015.

As a result of the finance ministers’ failure to reach a deal, the cost of insuring Greek debt against default shot to an all-time high.

The yield on 10-year Greek government bonds spike to a record high of more than 17pc as investors demanded a higher return to cover the risks of holding the debt.

Credit agency Standard and Poor warned that a move to restructure its debt would be considered a default and it reduced the long-term rating on Greek sovereign debt from B to CCC – only four notches above default and the lowest credit rating of any country it covers.

The downgrade has helped entrench the market view that Athens will have to restructure its debt.

In order for the next tranche of rescue loans to go through, the Greek parliament must adopt the new austerity plan by the end of June.