Greece | Crunch time as IMF debt looms and bailout ends

An elderly woman covers her head from the sun as she passes a banner that reads ‘’NO’’, hung up by supporters of the NO vote in the upcoming referendum in Athens

It’s crunch time for Greece, with the European part of its international bailout expiring yesterday and with it any possible access to the remaining rescue loans that it needs to pay its debts.
Without an 11th-hour deal, the government is unlikely to repay a debt of about 1.6 billion euros (USD1.9 billion) to the International Monetary Fund that was also due yesterday — a move that would amount to default and would increase fears the country could fall out of the euro currency bloc.
With banks shut and Greeks limited to cash withdrawals of 60 euros (USD67) per day, long lines formed once more at ATM machines. Capital controls began Monday and will last at least a week, an attempt to keep the banks from collapsing in the face of a nationwide bank run. Greeks flocked to get cash over the weekend after the prime minister called for a referendum on creditor demands in return for bailout loans.
There was speculation yesterday that a last-minute deal might be possible, with reports that Prime Minister Alexis Tsipras was to undertake an initiative based on a last-minute offer by European Commission President Jean-Claude Juncker. Markets in Europe rose on the hopes for a resolution of some kind.
In Brussels, European officials said the Commission chief was willing to help give Tsipras a belated way out of his financial crisis if he accepts creditors’ conditions on the bailout standoff and campaigns for staying in the euro.
An EU official, who asked not to be identified because of the sensitivity of the talks, called it “a sort of last-minute offer” before yesterday’s dual deadlines.
Under the offer, Tsipras would need to write to Juncker 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.
Tsipras, who advocates a “no” vote in Sunday’s popular vote, argues that 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 the referendum will lead Greece out of the eurozone and potentially out of the broader 28-country European Union. The government has responded by saying this is scaremongering, and that a “no” vote will mean the country is in a better negotiating position.
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.
Tsipras himself was defiant in a television interview late Monday, 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!”
“We ask you to reject it with all the might of your soul, with the greatest margin possible,” Tsipras said on state television. “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 was planned for yesterday night.
The government insists that a “no” vote on Sunday will not mean an exit from the euro, with Tsipras saying in his Monday night interview that Europe would not dare kick Greece out of the joint currency. Elena Becatoros, Athens, AP