Crunch time for Greece as IMF debt looms and bailout ends

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Crunch time for Greece as IMF debt looms and bailout ends
ELENA BECATOROS, Associated Press

ATHENS, Greece (AP) — It's crunch time for Greece, with the European part of its international bailout expiring Tuesday and with it any possible access to the remaining rescue loans that it needs to pay its debts.

Without an 11th-hour deal, the government is unlikely to repay a debt of about 1.6 billion euros ($1.9 billion) to the International Monetary Fund also due Tuesday — a move that would amount to default and would increase fears the country could fall out of the euro currency bloc.

With banks shut and Greeks limited to cash withdrawals of 60 euros ($67) per day, long lines formed once more at ATM machines. Capital controls began Monday and will last at least a week, an attempt to keep the banks from collapsing in the face of a nationwide bank run. Greeks flocked to get cash over the weekend after the prime minister called for a referendum on creditor demands in return for bailout loans.

There was speculation on Tuesday that a last-minute deal might be possible, with reports that Prime Minister Alexis Tsipras was to undertake an initiative based on a last-minute offer by European Commission President Jean-Claude Juncker. Markets in Europe rose on the hopes for a resolution of some kind.

In Brussels, European officials said the Commission chief was willing to help give Tsipras a belated way out of his financial crisis if he accepts creditors' conditions on the bailout standoff and campaigns for staying in the euro.

An EU official, who asked not to be identified because of the sensitivity of the talks, called it "a sort of last-minute offer" before Tuesday's dual deadlines.

Under the offer, Tsipras would need to write to Juncker and other leaders saying he accepts the latest offer, which was on the table last weekend. He would also have to change his position on Sunday's referendum.

Tsipras, who advocates a "no" vote in Sunday's popular vote, argues that the demands from creditors for further, tougher austerity measures cannot be accepted after six years of recession.

European officials and Greek opposition parties have warned that a rejection of the creditor proposals in the referendum will lead Greece out of the eurozone and potentially out of the broader 28-country European Union. The government has responded by saying this is scaremongering, and that a "no" vote will mean the country is in a better negotiating position.

The crisis has roiled global markets as investors fret over the repercussions of a Greek debt default and its exit from the euro — developments that could derail a fragile global economic recovery, as well as raise questions over the long-term viability of the euro currency.

The Stoxx 50 index of leading shares was down 0.3 percent, having been down 0.8 percent earlier. Germany's DAX was trading flat after being down 0.6 percent. All indexes recorded big losses the previous day, with U.S. stocks logging their worst day of the year.

Tsipras himself was defiant in a television interview late Monday, urging voters to reject creditors' demands. More than 13,000 people gathered in Athens to support him and denounce Greece's creditors, as they chanted: "Take the bailout and go!"

"We ask you to reject it with all the might of your soul, with the greatest margin possible," Tsipras said on state television. "The greater the participation and the rejection of this deal, the greater the possibility will be to restart the negotiations to set a course of logic and sustainability."

A protest by supporters of a "yes" vote is planned for Tuesday night.

The government insists that a "no" vote on Sunday will not mean an exit from the euro, with Tsipras saying in his Monday night interview that Europe would not dare kick Greece out of the joint currency.

Finance Minister Yanis Varoufakis went further, threatening court action if attempts were made to remove the country from the joint currency.

"The Greek government will make use of all our legal rights," Varoufakis told Britain's Telegraph newspaper.

"We are taking advice and will certainly consider an injunction at the European Court of Justice. The EU treaties make no provision for euro exit and we refuse to accept it. Our membership is not negotiable," he told the paper, in comments released by the ministry.

On the streets of Athens, Greeks began adjusting to the new reality of restricted cash. Pensioners have been hit particularly hard, as many do not have bank cards and so found themselves completely cut off from their money.

A day after worried elderly Greeks swarmed banks in the hope they would open, the finance ministry said Tuesday morning it would open about 1,000 bank branches across the country for three days this week to allow pensioners without bank cards to make withdrawals. But the limit for them would be set at 120 euros for the whole week, rather than the 60 euros per day allowed for those with bank cards.

Meanwhile, irate depositors called in to television stations to report that some ATMs had run out of 20 euro notes, leaving them dispensing 50 euros only.
____

Raf Casert in Brussels contributed.


-- (c) Associated Press 2015-07-01

[Basil B]

The government insists that a "no" vote on Sunday will not mean an exit from the euro, with Tsipras saying in his Monday night interview that Europe would not dare kick Greece out of the joint currency.

Famous last words but with his attitude, if the Greeks want not only to stay in the joint currency but the also the Common Market the need to ditch that guy ASAP.

[green job]

Common Market!! havent heard that heading for 25 years. 4th Reich YES. And now it is starting to crumble as expected ( thank God )

[JetsetBkk]

Common Market!! havent heard that heading for 25 years. 4th Reich YES. And now it is starting to crumble as expected ( thank God )

If only it was still, and only, the "Common Market"!

That's what most of us wanted, not this political garbage that it has grown into.

[godden]

The EU a corrupt evil empire.

[sanuk711]

I had a Greek dinner last night.

I left the restaurant without paying the bill..................................

[BuaBS]

Meanwhile, irate depositors called in to television stations to report that some ATMs had run out of 20 euro notes, leaving them dispensing 50 euros only.

So funny after all these years , especially last months , weeks and days ( and the rude Cyprus haircut ) , people still have money in the bank.

There should be a bank run in all of europe. (Yes, I already did, in case you are wondering.)

[micmichd]

Just spread the rumours of a bank run, and you'll have a bloody bank run. Then everybody can see who rules EU: Money that is long past gone.

[Baerboxer]

Common Market!! havent heard that heading for 25 years. 4th Reich YES. And now it is starting to crumble as expected ( thank God )

4th Reich? There are probably some who wish invading Greece was an option. Probably the only way to ever get what they owe back.

Again, those who checked and passed the forged figures, and those who did the forging, so Greece could join the Euro (and possible even the EU) also need to be brought to account. But, as usual they won't. Because some crimes and criminals are simply above the law.

[winstonc]

Common Market!! havent heard that heading for 25 years. 4th Reich YES. And now it is starting to crumble as expected ( thank God )

4th Reich? There are probably some who wish invading Greece was an option. Probably the only way to ever get what they owe back.

Again, those who checked and passed the forged figures, and those who did the forging, so Greece could join the Euro (and possible even the EU) also need to be brought to account. But, as usual they won't. Because some crimes and criminals are simply above the law.

goldman sachs is the corrupt company who should be in court..

[Steely Dan]

The government insists that a "no" vote on Sunday will not mean an exit from the euro, with Tsipras saying in his Monday night interview that Europe would not dare kick Greece out of the joint currency.
Famous last words but with his attitude, if the Greeks want not only to stay in the joint currency but the also the Common Market the need to ditch that guy ASAP.

You need to ask yourself why he should be so confident that Greece won't be kicked out of the Eurozone. The answer is dominoes among the PIIGS.

[Loptr]

Finally, some wise words on the topic of Greece...