Greece teeters on brink of default

Greece teeters on brink of default

 Greece appeared set today to default on a key IMF repayment, fanning fears of a chaotic eurozone exit on the day the country's international bailout also expires.

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

Failure to pay would see Greece become the first country to default on the International Monetary Fund since Zimbabwe in 2001, and in terms of standards of living, it would be the wealthiest.

Tsipras, elected on an anti-austerity ticket in January, has made clear Greece would be unable to make the 1.5 billion euro (USD 1.7 billion) payment due to the IMF today.

"(How) is it possible the creditors are waiting for the IMF payment while our banks are being suffocated?" he said in a late-evening interview on ERT television.

Thousands of people poured onto the streets of Greece's two biggest cities, Athens and Thessaloniki, last night to support their government's opposition to the latest proposals, after a clash with creditors forced the closure of banks and the imposition of capital controls.

Greece's international bailout programme from its "troika" of lenders -- the European Union, European Central Bank and the IMF -- also expires Tuesday.

Talks between Greece's leftist government and its creditors fell apart after Tsipras called a shock referendum on the latest proposals.

Tsipras sought to calm nerves on Monday by leaving the door open to talks, saying the July 5 plebiscite on the creditors' latest cash-for-reform plans would leave Greece "better armed" in the fight for a debt deal.
EU leaders including Germany's Angela Merkel, France's Francois Hollande and Italy's Matteo Renzi, wrong-footed by Tsipras, warned it would effectively be a vote on Greece's place in the eurozone.

The government has called for Greeks to vote 'No' rejecting the creditors' debt proposals and Tsipras has staked his own career on the outcome.

On Monday, an emotional European Commission head Jean- Claude Juncker bitterly criticised Tsipras, saying he felt "betrayed" by the hard-left Syriza government.

"A 'No' would mean, regardless of the question posed, that Greece had said no to Europe," said Juncker.

Spanish Prime Minister Mariano Rajoy added that a "yes" win in the referendum would allow Greece's creditors to negotiate with a new government.

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