EU Commission: Third bailout deal with Greece possible before August 20

The Athens stock exchange closed down 2.44pc at 643.86 yesterday, after falling by as much as 4.4pc, while an index of the country’s top four banks fell 25pc to 246.50. To avoid defaulting on it, Greece would need money from the bailout program it is negotiating or, short of that, an interim loan from its creditors.

“If the “troika” continue to insist on unrealistic fiscal targets, the Greek economy will remain in depression”, according to NIESR’s new paper.

Banks, which saw huge losses over the past three days, gained a collective 18 percent.

Government spokeswoman Olga Gerovasili said the government would not form a national unity government and described early elections as “likely”.

When creditors agreed in July to negotiate a deal aimed at keeping it afloat and in the euro zone, Greece committed to implementing major reforms, such as scrapping early retirement, by the end of October.

ATHENS, Greece (AP) – Greece’s prime minister said his country was in the “final stage” of talks for a new bailout, as his left-wing government on Wednesday rejected the idea of extending the negotiations beyond this month.

Greece faces a loan repayment on 20 August worth more than €3 billion to the European Central Bank.

“All the reports I am getting suggest an accord this month, preferably before the 20th”, Juncker told AFP in an interview.

“The key determinant for bank values remains the outcome of the coming comprehensive assessment by regulators”, said analyst Nick Koskoletos at Athens-based Eurobank Equities.

Though Greece and its lenders were optimistic on Tuesday that they could broker a deal amid the multibillion-euro bailout, bank shares have dropped again.

“We must create roads ever where there are none and do everything possible to create the conditions of social justice, so that all social groups may secure their incomes”, Tsipras pointed out.

“We discussed the recapitalisation issue of Greek banks”.

“The worst manufacturing PMI number ever… well below the economic breakeven level of 50, (threw) into sharp focus the damage done to the Greek economy in the last few weeks by political uncertainty and the ongoing capital controls”, said CMC’s Hewson.

“We will have implementation legislation, and points on which the negotiations will not even have ended until the end of the year, such as on labour and non-performing loans”, she said.

In two votes on the bailout, Tsipras lost the support of up to 39 of his party members with several ministers resigning in protest at austerity measures.