Eurozone refuses Greek bailout extension

Protesters shout slogans in front of the parliament building during an anti-austerity rally in Athens, Greece. (REUTERS/Alkis Konstantinidis)
Eurozone finance ministers declined to extend Greece\’s bailout Tuesday hours before its expiry and a possible IMF default but talks will continue Wednesday after Athens asked for a new aid plan, officials said.
Greek Prime Minister Alexis Tsipras requested a two-year rescue deal with the European Union to save the crisis-hit country, just hours before the European part of its EU-IMF bailout expires at 2200 GMT.
Tsipras also requested a short extension to its current bailout programme to avoid a "technical default," with a 1.5 billion euro payment due to the International Monetary Fund imminently.
But after a conference call to discuss the last-minute proposal, EU politicians confirmed that they had not agreed to it.
"Last deadline for Greece program extension was weekend. Due to parliamentary procedures, unable to extend program beyond today," Slovakia\’s Finance Minister Peter Kazimir wrote on Twitter.
Finnish Finance Minister Alex Stubb said an extension was "not possible", adding requests for a new rescue programme with the European Stability Mechanism (ESM), the EU\’s bailout vehicle, "is always dealt with through normal procedures."
Eurogroup head Jeroen Dijsselbloem told CNN: "The political circumstance and the political stance… doesn\’t seem to have changed — we are still of course awaiting the referendum."
However Malta\’s Prime Minister Joseph Muscat said that Greece had offered to suspend its planned referendum on its bailout terms if negotiations with the EU are reopened, the Times of Malta reported.
Before the Eurogroup call ended, the European Financial Stability Fund (EFSF), a body which helps support eurozone countries in difficulty, confirmed that the end of the bailout was imminent.
"It is regrettable for Greece that the EFSF programme will expire today without any follow-up arrangement and that the positive results of the programme are put at risk," its boss Klaus Regling said in a statement.
"Due to the economic policies adopted under the EFSF programme, the country was on a good path towards strong growth until the second half of 2014."
A Greek government source said the talks had concluded for the day and were set to resume Wednesday morning "to allow finance ministers to examine the proposals of the Greek government".
Eurozone ministers previously rejected Greece\’s request for an extension to its bailout following the Greek government\’s announcement of a referendum on Sunday on reform demands by Athens\’ creditors.
Greece has asked for a new 2-year bailout
Greece requested a two-year rescue deal with the EU in a race down to the wire Tuesday, after admitting it would fail to make an IMF payment with just hours left before its international bailout expires.
The zero-hour appeal came amid a flurry of actions aimed at preventing a chaotic eurozone exit which could have untold repercussions on international markets and the European Union.
The Greek premier\’s office said Athens has requested an agreement with the European Stability Mechanism "to fully cover its financing needs and the simultaneous restructuring of debt".
The ESM, created in 2012, is designed as a means to handle financial crises in the eurozone and keep the single currency region stable.
The move prompted quick reaction from Eurogroup chief Jeroen Dijsselbloem who tweeted that the eurozone finance ministers would hold a teleconference later Tuesday to discuss the Greek request.
Athens\’s proposal followed European Commission chief Jean-Claude Juncker\’s attempt to clinch a "last-minute" solution before the referendum.
Juncker told the Greek premier that a deal would involve accepting reform proposals that Greece\’s EU-IMF creditors made at the weekend and backing a \’Yes\’ vote in Sunday\’s plebiscite.
Prime Minister Alexis Tsipras has urged Greeks to reject creditors\’ tough reform demands in a referendum on Sunday, but has also pleaded for a bailout extension to keep Athens afloat.
The programme from the "troika" of lenders — the EU, European Central Bank and International Monetary Fund — expires Tuesday.
Chancellor Angela Merkel of Germany, Europe\’s paymaster, said she would not discuss any new Greek request until after Sunday\’s referendum.
"Before the referendum Germany can\’t negotiate a new request" for assistance, Merkel was quoted as saying by a lawmaker of her conservative Christian Democrats.
Whether an accord was in the offing or not, Greece said it would miss a 2200 GMT deadline to make a debt repayment of about 1.5 billion euros ($1.7 billion) to the International Monetary Fund.
If it fails to make the IMF payment, Greece could risk leaving the euro.
It would then become the first country to default on the IMF since Zimbabwe in 2001, and the wealthiest, in terms of standards of living.
Negotiations fell apart after Tsipras called a shock referendum on Greece\’s creditors latest proposals.
Tsipras sought to calm nerves on Monday by leaving the door open, saying the July 5 plebiscite on the creditors\’ cash-for-reform plans would leave Greece "better armed" in the fight for a debt deal.
EU leaders Merkel, France\’s Francois Hollande and Italy\’s Matteo Renzi have warned that the referendum would effectively be a vote on Greece\’s place in the eurozone.
Meanwhile world-renowned economists including US Nobel Prize winner Joseph Stiglitz and leading French economist Thomas Piketty have called on EU leaders to guard against "creating bad history" in their standoff with Greece.
In a letter published Tuesday in the Financial Times newspaper they called on creditors to give Greece "a fresh start, bearing in mind, first, that the contractionary austerity policy demanded of Greece has been discredited by the IMF\’s own research department."
In Greece, many people have been caught up in lengthy queues at ATMs after banks were shut down for one week, to withdraw the maximum daily allowance of 60 euros ($66). Tourists are however allowed unlimited withdrawals.
"We brought quite a lot of cash with us, but we\’ve been budgeting to make sure it doesn\’t run out," said Michele Ammann, 48, from Switzerland.
"I feel sorry for the Greeks, they\’ve been asked to sacrifice everything, right down to their underpants."
Many Greeks backed the government\’s defiant stance against the country\’s creditors, who they blame for forcing Greece into years of painful recession by demanding swingeing austerity cuts.
Pro-Greece demos were set to take place this week in Berlin, Paris, Madrid, Brussels, Rome and Amsterdam.
Turkey on Tuesday said it was "ready to help" its embattled neighbour out of its escalating financial crisis, "with cooperation in tourism, energy, trade."
And as the tussle over Greece\’s future intensified, sympathetic people donated over 65,000 euros to an online crowdfunding project set up by a British shoe-shop employee to help meet the IMF repayment.
In more gloomy news for Athens, Standard & Poor\’s ratings agency downgraded Greece\’s credit assessment deeper into junk territory, saying the referendum brought it closer to default.
Fitch also cut its ratings on four major Greek banks to "restricted default".
People stand in a queue to use an ATM outside a closed bank, next to a sign on the plant, bottom right, reading \’\’NO\’\’ in Athens, Tuesday, June 30, 2015. (AP Photo/Thanassis Stavrakis)
Greece has debt worth nearly 180 percent of its GDP after receiving two bailouts worth 240 billion euros since 2010. Unemployment has more than doubled since 2009 to 25.6 percent and pensions and benefits roughly halved between 2010 and 2014.
SOURCE: AFP and agencies
Merkel ally says surprised by new proposals from Brussels
A German senior conservative lawmaker, Volker Kauder, said on Tuesday he was surprised that Brussels was coming up with new proposals for Greece now as the government in Athens had broken off talks.
"It\’s somewhat surprising that new proposals are coming from Brussels now," he said after EU authorities made a last-minute offer to salvage a bailout deal that could keep Greece in the euro zone, describing statements from Brussels as "irritating".
"The fact remains that Greece broke off the negotiations."
Kauder also said that if the Greeks thought they needed more help from Europe after the referendum planned for Sunday they would have the possibility of making an application via the euro zone\’s bailout fund, the European Stability Mechanism (ESM). Reuters
British shoe seller tries to crowdfund Greek bailout
Thom Feeney, pictured on June 30, 2015, has launched an online crowdfunding campaign to raise the money for Greece to meet its IMF debt repayment (AFP Photo/Niklas Halle\’N)
A British shoe shop worker has launched an online crowdfunding campaign to raise the money for Greece to meet its IMF debt repayment due on Tuesday, saying he just wanted to help austerity-stricken Greeks.
Thom Feeney told AFP outside his shop in London\’s Covent Garden that he had been overwhelmed by the response and the messages of support, raising 209,000 euros ($233,000) by 1600 GMT after just two days.
More than 13,000 people have donated to the IndieGoGo project "Greek Bailout Fund" so far but it was still a long way from the final target of 1.6 billion euros that Greece needs to make its debt payment.
"Watching politicians going round in circles and dithering somewhat with making a decision on Greece, I just thought, I think it just needs someone to step in and sort it," said the bearded 29-year-old, who was dressed in shorts and a T-shirt.
"I think the people of Europe can do that much quicker than the politicians can… The amount that we need per person is only 3.19 euros per citizen of the EU, so it\’s just a small amount," he said.
Feeney said it was his first attempt at crowdfunding and he spoke enthusiastically to AFP about his project, rejecting any talk of it being a joke.
The creator said he had no personal links to Greece but wanted to help Greek people in a time of hardship.
"I just thought perhaps a better way to help would be to do something immediately," he said.
Since setting up the webpage on Sunday, Feeney said the reaction has "snowballed", with "hundreds, if not thousands of goodwill messages" flooding in from across Europe.
Surprisingly, the bulk of donations in the first 24 hours came from Britain, which is not a eurozone member, and Germany, which has taken a hard official line on Greece\’s debt repayments.
Should the project be successful, donors will receive perks ranging from a postcard of Greek Prime Minister Alexis Tsipras, a feta and olive salad or a Greek holiday for two, depending on the size of the contribution.
Initially, there was a small Greek island on offer for anyone who stumped up the full total, but IndieGoGo asked Feeney to remove the offer as the Greek government had not agreed to it.
"I hope it can reach the total. It would be fantastic if it could," said Feeney, from York in northern England.
"Regardless, it has made a bit of a statement that real people do care about other people across Europe."
Under the terms of the crowdfunding site, donations will be refunded if the target is not reached within seven days.
But Feeney hopes a way can be found to put the money to good use if donors are willing.
"It would be lovely if we could find a way for people\’s donations to still count and go towards something — perhaps some kind of initiative to help Greek people get into work or sell produce abroad."
A supporter of the NO vote in the upcoming referendum, holds an old 1,000 drachma bank note during a rally in the northern Greek port city of Thessaloniki, Monday, June 29, 2015. (AP Photo/Giannis Papanikos)
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