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Greece on the brink

If no agreement is reached, Greece will default on a loan to the IMF, setting it potentially on a path out of the euro with unforeseeable consequences for both the European Union’s grand currency project and the global economy. File Photo of the Bank of Greece in Athens.   | Photo Credit: JOHN KOLESIDIS

The Alexis Tsipras government on Tuesday pleaded for a short-term bailout extension to avert a midnight default as frantic efforts gathered pace to salvage a deal that could keep Greece in the euro, with Germany warning that time had run out to extend vital credit lines.

As the clock ticked down towards midnight, when billions of euros in locked-up bailout funds are due to expire, Eurozone finance ministers called a last-minute conference call to discuss the Greek request.

European Commission President Jean-Claude Juncker appealed to Athens to accept the deal proposed by international creditors last week while holding out hopes that some extra tweaks could still be possible.

Leftist Greek Prime Minister Alexis Tsipras, who has called a referendum for Sunday to vote on the bailout terms, responded with a counter-proposal, requesting a two-year deal covering funding support and debt restructuring, an issue the lenders have so far been reluctant to tackle.

If no agreement is reached, Greece will default on a loan to the IMF, setting it potentially on a path out of the euro with unforeseeable consequences for both the European Union’s grand currency project and the global economy.

EU and Greek government sources said Juncker, who spoke to Tsipras late on Monday, had offered to convene an emergency meeting of euro zone finance ministers to approve an aid payment to prevent Athens defaulting if the Greek leader sent a written acceptance of the terms.

However, as last-ditch efforts continued, the growing risk of Athens being forced out of the single currency brought into sharp focus the chaos likely to be unleashed in Greece and the risks to the stability of the euro. The last-ditch bid from Brussels came as uncertainty built ahead of Sunday’ referendum, in which Tsipras has called for a “no” vote.


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Printable version | Oct 21, 2021 9:52:49 PM | https://www.thehindu.com/news/international/world/greece-debt-crisis/article7373485.ece

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