Talks between Greece and its creditors on a cash-for-reform deal broke down on Sunday, the biggest setback in long-running negotiations aimed at preventing a default and possible euro exit.
The European Commission has said it will only resume talks if Greece put forward new proposals, while Athens is sticking to its rejection of wage and pension cuts and higher taxes on basic goods, while also insisting debt relief be part of any deal.
"The issue is that he (Greek Finance Minister Yanis Varoufakis) damages the balance sheet of every European country if he insists on the write down of debt on a nominal basis," Noonan told a sitting of Ireland's parliamentary finance committee dominated by the Greek crisis.
"On the other hand, if he negotiates an extension of maturities and a lowering of interest rates, there is scope there. But, in these negotiations, to get something, you have to give something."
While Prime Minister Alexis Tsipras accused creditors of trying to "humiliate" Greeks, Noonan gave an indication of the frustration being felt by colleagues, saying he knew of finance ministers of at least five smaller European countries who haved asked how they can lend Athens more money when Greeks enjoy a higher minimum wage and more favourable pension benefits.
"Greece would be gone down long ago if it hadn't been for the solidarity shown by the European taxpayers," Noonan said, repeating Ireland's position that it wants Greece to remain in the euro zone but will not agree to write off any of its debt.
"Even if the present situation was resolved, they need, whatever they call it, a contract or a third programme and who's going to give it to them if they refuse point blank to make any effort to repay the 350 billion euros they already owe?"
Echoing comments from Finland's Prime Minister, who said it would take "a miracle" to reach a solution next week, Noonan said he did not believe finance ministers would be in a position to have a substantive discussion on Greece this week.
"I was talking to colleagues on the phone last week and it appeared to them, from their information from Brussels, that we were on the cusp of an agreement ... The gap now again seems to be unbridgeable," he said.
"What is absolute, is that the timeframe is very tight now and even with the best will in the world, on tight timeframes accidents can happen."
(Editing by Robin Pomeroy)
By Padraic Halpin
