Greece submits new bailout plan to avoid euro exit

The admission by hardline German Finance Minister Wolfgang Schaeuble came hours before the midnight deadline for Athens to submit its reform plan.

Earlier Greek Prime Minister Alexis Tsipras accused creditors of transforming Greece into an “austerity laboratory”.

Centrist European Union lawmaker Sylvie Goulard told Tsipras: “In the words of a well known advertising slogan, ‘Just do it!'”.

French President Francois Hollande and German Chancellor Angela Merkel said Monday that they respect Greece’s referendum of the weekend and are open to negotiations, with Hollande stressing the “urgency” of finding a solution to the economic impasse.

Athens has applied for a third bailout through the European Stability Mechanism (ESM) to avoid bankruptcy and the possibility of crashing out of the euro.

“Today, the majority of the Greek people…feel that they have no other choice other than to demand that they be given a way out of this dead end and they have expressed this in the most direct way possible and we have to implement that decision”. A “comprehensive and specific reform agenda” will be submitted on Thursday at the latest, it said.

Tsipras insisted he has “no hidden agenda” to drive Greece out of the euro and that last Sunday’s referendum in which Greeks roundly rejected more belt-tightening reforms does not mean a break with Europe.

In ideal circumstances, a summit of all 28 European Union leaders would be able to approve it on Sunday.

The International Monetary Fund – which along with the EU and European Central Bank make up Greece’s principal creditors – last week said Brussels would need to stump up another 36 billion euros ($40 billion) to keep the country afloat.

Tusk said after also speaking with Tsipras that a “realistic proposal from Greece will have to be matched by an equally realistic proposal on debt sustainability from the creditors”. US President Barack Obama has urged Europe to not cut Greece adrift.

International Monetary Fund Chief Economist Olivier Blanchard told CNN any deal needed to contain reforms, and debt relief, “otherwise the plan makes no sense”.

“The room for manoeuvre through debt reprofiling or restructuring is very small”, he said.

The three-year loan would enable Greece to cover its debt obligations, the ministry said, preventing it from defaulting and ensuring it does not have to drop out of the Euro.

Germany is ruling out an outright debt cut, arguing that it would be illegal under European treaties.

Greek banks have been closed since June 29, when capital controls were imposed and cash withdrawals rationed after the collapse of previous bailout talks.

The closures have been extended through Monday.

“Can you see anybody in the shop?”

Alternate Finance Minister Dimitris Mardas said the banks would be gradually restored to operation. “Until a month ago business was going pretty well”.

In particular, it has fallen far short of targets on privatising state assets and struggled to improve tax collection and reform labour laws and a costly pension system. Some branches have been opened so the elderly and unemployed without bank cards can withdraw a maximum weekly sum of 120 euros each. Separately, many ATMs had a shortage of 20 euro notes, effectively reducing the daily withdrawal limit to 50 euros. “We will pay dearly for it, but at least we’ll get an agreement“, said mechanic Pantelis Niarchos, walking down the street in central Athens.

France’s Socialist government has been among the Greek government’s few allies in the eurozone during the past months of tough negotiations.

Instead it maintained the cap on emergency liquidity assistance (ela) for Greece at just under €89 billion. But the European Central Bank has not increased the amount in days, leaving the lenders in a stranglehold despite capital controls.

“It is important that the Greek government acknowledges that there is still a lot to be done and comes up with credible proposals”, they wrote.

He said in a speech it was up to eurozone governments and Greek leaders themselves to rescue Greece. But it was forced to resume talks with the creditors as the Greek banks faced the prospect of collapse within days if the country did not receive a new rescue package.