Greece may
make new proposals to creditors in order to reach an agreement to
release more bailout cash, a Greek minister said today.
The
news comes as the European Central Bank yesterday extended Greece a
financial lifeline in a desperate effort to prop up the country’s
crippled banking system.
The
ECB raised the ceiling on so-called emergency liquidity assistance,
which the banks rely on to keep their doors open, by €1.8billion.
Proposals: Prime Minister Alexis
Tsipras will probably speak with European Commission chief Jean-Claude
Juncker by phone today ahead of Monday's meeting
‘We
will try to supplement our proposal so that we get closer to a
solution,’ State Minister Alekos Flabouraris tolda Greek television
show.
‘We
are not going there with the old proposal. Some work is being done to
see where we can converge, so that we achieve a mutually beneficial
solution.’
He
also said that Prime Minister Alexis Tsipras will probably speak with
European Commission chief Jean-Claude Juncker by phone today to try to
end the deadlock ahead of Monday’s emergency meeting between eurozone
leaders.
Greece
is due to repay €1.6billion (£1.1billion) to the International Monetary
Fund on June 30, but earlier this week it said it didn't have the
money.
IMF managing director Christine Lagarde said that Athens will not be given a ‘grace period’ if it fails to make the payment.
The
country has been locked in negotiations with European leaders but it
has failed to reach an agreement over the reforms requested by its
creditors in return for more funds.
The
news comes as British banks slashed their exposure to Greece yesterday
amid fears the country is heading for bankruptcy and expulsion from the
eurozone.
Figures
from the Bank of England showed the UK lenders, pension funds and other
financial firms had £2billion tied up in the crisis torn nation at the
end of March. That was the smallest amount since records began in 2004
and down from £9.6billion a year earlier and a peak of £12.4billion in
March 2008.
British banks have been pulling out of Greece in order to protect themselves from financial and economic collapse.
Bank
of England and Treasury officials are confident the UK financial system
can withstand a Greek default and exit from the eurozone – but they are
worried about the knock-on effect on economic confidence. Earlier this
year, bank governor Mark Carney told MPs that British banks had ‘a very
small direct exposure to Greece’.
But
he has raised concerns about the impact of a Grexit on economic
stability in the eurozone, Britain’s biggest trading partner.
The
European Central Bank yesterday extended Greece a financial lifeline in
a desperate effort to prop up the country’s crippled banking system.
It
is feared Greek banks might be forced to remain closed on Monday as
savers withdraw cash faster than the authorities can provide support.
Greeks have pulled more than £2billion out of their banks in recent
days.
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