When asked while walking into the Finance Ministry about whether Greece will pay the 1.6 billion euros (NZD$2.6bn) due to the IMF, Varoufakis said “no”.
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“The Greek government’s willingness to walk into the fire is a risky proposition for Europe and the global markets”, Kathy Lien, managing director of FX strategy for BK Asset Management in New York, said in a note to clients.
But Greece’s national broadcaster ERT said on Tuesday morning that discussions about the proposals were taking place “at the highest level” in Athens.
“The Greek government today proposed a two-year agreement with the European Stability Mechanism (ESM) to fully cover its financing needs and the simultaneous restructuring of debt”, the prime minister’s office said in a statement.
If Greece misses its payment on Tuesday, then the IMF will consider it in “arrears” – a technical term used by the IMF, which is similar to “default”. This, IMF chief Christine Lagarde told the BBC last week, has “never happened in the case of an advanced economy”.
Greece’s decision to push ahead with the plebiscite saw Standard & Poor’s rating agency downgrade Greece’s credit rating deeper into junk territory, saying the referendum brought it closer to default.
Withdrawal limits of €60 a day have been fixed for cash machines and there have been long queues at petrol stations and in supermarkets as anxious shoppers have stocked up on essentials like pasta and rice.
Fitch downgraded Greek banks on Monday to “Restricted Default” following the imposition of capital controls in Greece, in order to prevent an exodus of deposits.
A Greek official said Mr Tsipras has spoken with European Commission President Jean-Claude Juncker, European Central Bank chief Mario Draghi and European Parliament president Martin Schulz.
Stock markets in Europe continued to fall soon after opening on Tuesday, after closing down on Monday.
“This evening at exactly midnight Central European Time the program expires”.
But Valiante says whether or not Greece pays back the IMF on time has no consequences for emergency assistance coming from the ECB.
Stunning rebuke… European Commission President Jean-Claude Juncker said he felt “betrayed” and sad by Greece’s “egotism, tactical games, populist games” during the failed debt talks. The official spoke on condition of anonymity in line with government regulations.
But after a conference call to discuss the last-minute proposal, EU politicians confirmed that they had not agreed to it.
Under the offer, Tsipras would need to write to Junker and other leaders saying he accept the latest offer which was on the table last weekend. “Doesn’t seem to have changed – we are still of course awaiting the referendum”.
Beyond accepting the creditors’ proposal, Commission spokesman Margaritis Schinas said the offer would also involve unspecified discussions on Athens’s massive debt load of over 300 billion euros and around 180 percent of GDP.
Juncker had expected an answer before midnight Monday, but was still waiting by early afternoon Tuesday.
“I’ve got five euros in my pocket, I thought I would try my luck here for some money”. The government has responded by saying this is scaremongering, and that a rejection of creditor demands will mean the country is in a better negotiating position. The Greek side argues that pension cuts and tax hikes demanded of it would only deepen one of the worst economic crises of modern times in a country where a quarter of the workforce is already unemployed.
The last-minute attempts to negotiate a deal for Greece helped stocks Tuesday.
In early trading, the Stoxx 50 index of leading European shares was down 0.9 percent while Germany’s DAX fell 0.7 percent. It was unclear how much ground Tsipras was conceding in the latest proposal.
GREECE has requested a two-year rescue deal to save the crisis-hit country after it revealed that it would not meet a crucial payment deadline. European officials and Greek opposition parties have been adamant that a “no” vote in Sunday’s referendum will mean Greece leaves the euro and possibly even the EU.
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If the reaction to the crisis went further and Greece left the EU, the symbolism of the country that gave birth to democracy leaving the union wouldn’t be lost on its critics.
