Greece has accepted the principle of extending its current bailout programme which expires at the end of the month so as to keep it afloat while a long-term debt solution is worked out, Greek government sources said Monday.
"For the first time, we accept the extension of the programme as the only way forward," one source said as eurozone leaders discussed Greece\’s future in the single currency ahead of the June 30 end of its current aid programme.
"We do not know how long the programme would be extended by," another source said.
The current bailout was agreed with the EU, European Central Bank and International Monetary Fund in 2012 and extended twice — in December and again in February this year for four months to end-June.
Greece has had to accept harsh austerity measures in return for bailout funds but the left-wing government of Alexis Tsipras elected in January has balked at taking more of the harsh measures in return for the last tranche of 7.2 billion euros ($8 billion) from the current programme.
Athens won the four-month reprieve in February promising to come up with alternatives to the austerity measures demanded by its three creditors but only produced a working package on Monday as eurozone leaders met to decide whether it had done enough to get the funds.
Without the money, Greece may not be able to make a 1.5-billion-euro repayment to the IMF due on June 30, risking a default and possible chaotic exit from the eurozone.
Several demonstrations backing Greece\’s stand against more austerity measures were held in European capitals including Brussels, Berlin, Rome and Paris over the weekend.
Failing a deal, Greece is likely to miss the IMF payment of around 1.5 billion euros, setting up a potentially chaotic "Grexit" from the eurozone, which Greece\’s central bank has said could also see it cast out of the EU.
The EU\’s involvement in Greece\’s bailout, which was to provide 240 billion euros in loans in exchange for drastic austerity measures and reforms, runs out at the end of this month, but IMF support is scheduled to continue to March 2016.