Zero hour offer as Greece lurches towards default
AFP
Greece confirmed it would fail to make a key IMF repayment due on Tuesday, fanning fears of a chaotic eurozone exit on the same day the countrys international bailout expires.
At the same time the European Commission said it had offered an eleventh hour deal to Prime Minister Alexis Tsipras to stave off a crisis which could rupture the eurozone and risks a knock-on effect on other troubled countries.
Tsipras has urged Greeks to reject creditors tough reform demands in a referendum on Sunday, but has also pleaded for an bailout extension to keep Athens afloat, reports AFP.
Failure to pay would see Greece become the first country to default on the International Monetary Fund since Zimbabwe in 2001. In terms of standards of living, it would be the wealthiest.
With just hours to go before the deadline, Finance Minister Yanis Varoufakis gave an emphatic no to questions over whether Greece would make the debt repayment of about 1.5 billion euros ($1.7 billion) on Tuesday.
Europes main stock markets dropped on the news, though losses were less acute than on Monday. Tsipras, elected on an anti-austerity ticket in January, on Monday blamed creditors for suffocating the banks and making it impossible for the country to pay up its debt.
Thousands of people poured onto the streets of Greeces two biggest cities, Athens and Thessaloniki, on Monday night to support their governments opposition to the latest proposals, after a clash with creditors forced the closure of banks and the imposition of capital controls.
Greeces international bailout programme from its troika of lenders -- the European Union, European Central Bank and the IMF -- also expires Tuesday.
Talks between Greeces leftist government and its creditors fell apart after Tsipras called a shock referendum on the latest proposals.
Tsipras sought to calm nerves on Monday by leaving the door open, saying the July 5 plebiscite on the creditors latest cash-for-reform plans would leave Greece better armed in the fight for a debt deal.
European Commission chief Jean-Claude Juncker set out a possible last-minute solution for an accord before the referendum, a commission source said. A euro-MP from Tsiprass hard-left Syriza party said the plan should be studied.
Juncker told the Greek premier that a deal would involve accepting reform proposals that Greeces EU-IMF creditors made at the weekend and backing a Yes vote in Sundays plebiscite.
A Greek government source said that negotiations were taking place between Athens and its creditors, though a European Commission spokesman said time was running out quickly.
German Chancellor Angela Merkel said she knew nothing about a new offer from Juncker for Greece. EU leaders including Merkel, Frances Francois Hollande and Italys Matteo Renzi have joined Juncker in warning that the referendum would effectively be a vote on Greeces place in the eurozone.
The government has called for Greeks to vote No rejecting the creditors debt proposals and Tsipras has staked his own career on the outcome. Spanish Prime Minister Mariano Rajoy added Tuesday that a Yes victory in the referendum would allow Greeces creditors to negotiate with a new government.
Athens lashed back Tuesday, with Labour Minister Panos Skourletis warning that European leaders want to sink Greeces ruling Syriza party to block the rise of other far-left anti-austerity parties like its ally Podemos in Spain.
