Unable to repay IMF, Greece seeks 2-year EU bailout

Greece requested a two-year rescue deal with the EU in a race down to the wire on Tuesday, after admitting it would fail to make an IMF payment with just hours 

left before its international bailout expires.The zero-hour appeal came amid a flurry of actions aimed at preventing a chaotic eurozone exit which could have untold repercussions on international markets and the European Union. The Greek premier’s office said Athens has requested an agreement with the European Stability Mechanism “to fully cover its financing needs and the simultaneous restructuring of debt”.

The European Stability Mechanism, created in 2012, is designed as a means to handle financial crises in the eurozone and keep the single currency region stable. The move prompted quick reaction from Eurogroup chief Jeroen Dijsselbloem, who tweeted that the eurozone finance ministers would hold a teleconference later on Tuesday to discuss the Greek request.

Athens’s proposal followed European Commission chief Jean-Claude Juncker’s attempt to clinch a “last-minute” solution before the referendum. Juncker told the Greek premier that a deal would involve accepting reform proposals that Greece’s EU-IMF creditors made at the weekend 

and backing a ‘Yes’ vote in Sunday’s plebiscite.

Prime Minister Alexis Tsipras has urged Greeks to reject creditors’ tough reform demands in a referendum on Sunday, but has also pleaded for a bailout extension to keep Athens afloat. 

The programme from the “troika” of lenders — the EU, European Central Bank and International Monetary Fund — expires on Tuesday night (Wednesday morning as per IST).

Chancellor Angela Merkel of Germany, Europe’s paymaster, said she would not discuss any new Greek request until after Sunday’s referendum. “Before the referendum Germany can’t negotiate a new request” for assistance, Merkel was quoted as saying by a lawmaker of her conservative Christian Democrats.

Whether an accord was in the offing or not, Greece said it would miss a 2200 GMT deadline to make a debt repayment of about 1.5 billion euros (USD 1.7 billion) to the International Monetary Fund. It would then become the first country to default on the IMF since Zimbabwe in 2001, and the wealthiest, in terms of standards of living. 

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