Greece seeks last-minute bailout

Greece has only a few hours before a deadline for a bailout agreement with Europe expires. Meanwhile, Athens is looking to a referendum on EU austerity measures on July 5 [Xinhua]

With only a few hours remaining before a deadline for Greece and its European creditors to reach a deal on debt restructuring, Athens is proposing a new two-year bailout agreement with the European Stability Mechanism (ESM).

The ESM is a permanent crisis resolution regimen which can extend loans and financial assistance to members of the eurozone.

A statement from the office of Greek Prime Minister Alexis Tsipras said the official request is to “fully cover [the government’s] financing needs and the simultaneous restructuring of debt”.

Athens has until the end of June 30, today, to repay more than $1.76 billion to the International Monetary Fund. If it defaults, it risks losing additional financial assistance from the European Central Bank and would have to seek another currency, prompting a possible exit from the eurozone.

European officials said the proposal will be discussed later on Tuesday.

The Greek government’s eleventh hour proposal comes as the benchmark Standard Poor’s (SP) ratings agency slashed Greece’s credit rating from CCC to CCC-, which effectively means that investors should avoid investing there.

It also comes as Greek banks close until the July 5 referendum called by Tsipras to vote on his government’s negotiating stand with the eurozone and Europe’s proposed austerity measures.

He has hinted he may resign if Greeks vote against his government’s position and is urging his people to vote no to the European set of austerity requirements.

Some European leaders have said a no vote would signal Greece’s intention to leave the eurozone.

On Monday, SP said that there is a 50 per cent chance that Greece would exit the eurozone.

European markets are already bracing for such an impact. Since Monday stocks and bonds have been falling, although the drop eased somewhat on Tuesday, and the euro continued to drop against the greenback. There are fears of a global equity selloff.

In London, for example, the FTSE 100 fell 1.5 per cent at closing on Tuesday, a day after posting it’s worst performance since March 2015.

Tsipras said on Monday that he would work to prevent Greece’s exit from the eurozone.

The BRICS Post with inputs from Agencies