Proposals To Extend Greek Bailout Are Rejected

Eurozone finance ministers have refused to extend Greece's bailout programme beyond Tuesday - meaning Athens is at risk of defaulting on a €1.5bn IMF payment.

The Greek government have announced a snap referendum on 5 July - and the country's Finance Minister, Yanis Varoufakis, had requested an extension of several weeks until it had taken place.

However, Eurogroup President Jeroen Dijisselbloem has said it will not be possible to provide a temporary extension until the result of the ballot is known.

The referendum was so voters could decide whether to accept a deal offered by Greece's creditors, which would see the current bailout scheme extended by five months, with an additional €12bn pumped into the economy. However, a series of reforms would have to be implemented in exchange.

Eighteen finance ministers are continuing informal talks in Brussels. Mr Varoufakis, who is not believed to be in attendance, said their rejection risked "permanent" damage to the Eurozone.

The fact that no progress has been made ahead of Tuesday's deadline for Greece's €1.5bn payment means there is a possibility that Athens will be unable to receive emergency support for its banks.

But Mr Varoufakis has told reporters that Greece was "still fighting" for a bailout deal, adding that there is still "the possibility of negotiating in the coming days to improve the agreement".

On Friday, Mr Dijisselbloem had warned that an agreement "must happen" on Saturday, otherwise there will not be enough time for any deal to work its way through parliaments in Greece and several other member states.

German Chancellor Angela Merkel had urged Greece to accept the €12bn lifeline, describing it as "extraordinarily generous".

But in a televised address, Mr Tsipras said the Greek government had been asked to accept "unbearable burdens" that would hit the job market and force tax hikes on workers.

He said he was obliged to respond based on the sovereign will of the Greek people, who would be asked to accept or reject the offer in the referendum question in just over a week.

The Prime Minister urged Greek voters to send a "sound response" to the world and sought to reassure them that whatever the outcome, "Greece will stay part of Europe".

Greece had put forward plans to make €8bn in savings through VAT increases, taxes on the wealthy and a cut in defence spending.

But the IMF claimed the proposals were insufficient and said further cuts to salaries and pensions were needed in exchange for the €7.2bn Greece badly needs to keep its economy afloat.

Speaking earlier in Brussels, Mr Tsipras slammed his country's creditors, telling reporters: "The European Union founding principles were democracy, solidarity, equality and mutual respect. It was not based on blackmail and ultimatums."

Greek ministers Nikos Pappas and Panayiotis Lafazanis both said they expected Greece to vote "no" to the terms for the referendum.

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