Eurozone refuses Greece bailout extension plea

Deadline to return 1.5 bn to IMF expires

Eurozone finance ministers declined to extend Greece's bailout on Tuesday, just hours before its expiry and a possible International Monetary fund (IMF) default, but talks would continue on Wednesday after Athens asked for a new aid plan, said officials.

“Last deadline for Greece program extension was weekend. Due to parliamentary procedures, unable to extend program beyond today (sic),” wrote Slovakia's Finance Minister Peter Kazimir on Twitter following a conference called to discuss the last-minute proposal.

Prime Minister Alexis Tsipras had requested a two-year rescue deal with the EU to save the crisis-hit country, just hours before its international bailout expired on Tuesday.

Tsipras also requested a short extension to its current bailout programme to avoid a “technical default”, with a €1.5-billion payment due to the IMF in just hours.

Finnish Finance Minister Alex Stubb said an extension was “not possible”, and a request for a new programme with the European Stability Mechanism (ESM), the bailout vehicle of the European Union (EU), “is always dealt with through normal procedures”.

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 EU.

The Greek premier’s office said Athens had requested an agreement with the European Stability Mechanism (ESM) “to fully cover its financing needs and the simultaneous restructuring of debt”.  The ESM, 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’ proposal followed European Commission chief Jean-Claude Juncker’s attempt to clinch a “last-minute” solution before the referendum.

Juncker told the Greek premier 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 IMF— expired on Tuesday.

Chancellor Angela Merkel of Germany, Europe’s paymaster, said she would not discuss any new Greek request until after Sunday’s referendum.

Greece’s default would make it the first country to do so on the IMF since Zimbabwe in 2001.