Crunch day as Greek bailout expires

Published: Tuesday 30th June 2015 by The News Editor

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Greece’s international bailout expires today – and with it any possible access to the remaining rescue loans it needs to pay its debts.

As a result, the government is unlikely to repay a 1.6 billion euro (£1.1 billion) debt to the International Monetary Fund also due today – a move that increases fears the country is heading to a messy default and potential exit from the euro.

With banks shut and Greeks limited to cash withdrawals of 60 euro (£42) per day, long queues formed once more at ATM machines today.

Capital controls began yesterday and will last at least a week, after a weekend bank run prompted by the prime minister’s call for a referendum on creditor demands in return for bailout loans.

Prime minister Alexis Tsipras argues 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 Sunday’s popular vote will lead Greece out of the eurozone and potentially out of the European Union itself. The government has responded by saying this is scaremongering, and that a “No” vote will mean the country is in a better negotiating position.

But European Council president Donald Tusk has warned that will not be the case.

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 itself.

The European Stoxx 50 index of leading shares was down a further 0.8% today and Germany’s DAX fell 0.6%, after recording big losses yesterday. US stocks had their worst day of the year.

In Brussels, European officials said European Commission chief Jean-Claude Juncker is willing to help give Mr Tsipras a belated way out of his financial crisis if he accepts creditors’ conditions on the bailout stand-off and campaigns for staying in the euro.

An EU official called it “a sort of last-minute offer” before today’s deadlines.

Under the offer, Mr Tsipras would need to write to Mr Junker 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.

But there appeared to be scant desire to do that, with numerous officials from Mr Tsipras’s radical left Syriza party arguing for a “No” vote on a series of television and radio appearances.

Mr Tsipras himself was defiant in a television interview late yesterday, 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.”

Mr Tsipras said: “We ask you to reject it with all the might of your soul, with the greatest margin possible.

“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 tonight.

Published: Tuesday 30th June 2015 by The News Editor

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