Following a meeting between finance ministers of the eurozone, Eurogroup has dismissed a eleventh hour proposal from Greece for a two year bailout plan on Tuesday
Eurozone finance ministers dismissed the proposal leaving Greece with no other choice but to default on a $1.8 billion commitment to the International Monetary Fund (IMF) due June 30.
Another Eurogroup meeting is scheduled for Wednesday, whereby Greece is anticipated to make further proposals, according to Eurogroup chairman Jeroen Dijsselbloem
Head of the European Financial Stability Facility, the crisis fund for members of the Eurgroup, Klaus Regling said the dismissal puts "the positive results of the [current bailout] program at risk."
It was “regrettable” that Greece is currently without a new bailout program, he added.
Greece has requested the IMF to extend the Tuesday deadline, which if denied may force the country out of the eurozone.
"We have filed a request with the IMF asking it to take the initiative to delay the payment until November," deputy prime minister Ioannis Dragasakis said on national Greek television.
Greek Prime Minister Alexis Tsipras on Sunday called his nation to vote in a referendum for bailout terms, offering proposals to reduce the pressure on bank balance sheets. Thus, each proposal comes with a cost.
Speaking to a national TV channel on Monday, Tsipras told the Greek public that he will not stay in his post and oversee the cuts if the bailout is accepted in the referendum.
"If the Greek people want to proceed with austerity plans in perpetuity, which will leave us unable to lift our head... we will respect it, but we will not be the ones to carry it out," he said.
Tsipras said “the bigger the turnout and the wider the no-vote to that deal, the bigger the possibility for a substantial restart of negotiations, so that we can take a course of viability and reason.”
Saying that other EU member countries want Greece to stay in Euro-zone, Tsipras told “I don’t believe that they want to kick us out of the euro and they won’t. They won’t, because the cost would be huge.”
During the television broadcast, Tsipras also said that Greece’s fight against austerity will be an example to those European societies which have been suffering under austerity policies and trying to find another route to economic recovery.
The Tsipras government has been negotiating with the IMF and the ECB, over the past four months about the release of some 7.2 billion euros in aid.
Eighteen countries, which are participating in the eurozone, have accused Greece of dropping out of negotiations and vowed to do all that is necessary to stabilize the Euro bloc.
Christine Lagarde, chief of the IMF, announced that if the referendum vote on Tuesday resulted in "a resounding yes" to endure within the eurozone and solve the problems of the Greek economy, then the creditors would be more assistive and lenient in sealing a deal
German chancellor, Angela Merkel has said negotiations may get back underway following the July 5 referendum.
“If Greek government asks for new negotiations after the referendum, for example, of course we will not refuse such talks,” the chancellor said following an emergency meeting with government officials and economic advisors.
The US State Department has released a statement on Monday, pushing for a deal to keep Greece within the eurozone and expressed their disagreement with options leading to Greece’s withdrawal from the common currency zone.
Obama called Merkel on Sunday to review the latest developments on Greece, after creditors refused to extend the deadline for repayment.
"The two leaders agreed that it was critically important to make every effort to return to a path that will allow Greece to resume reforms and growth within the Eurozone," said a statement from the White House.
Obama said he and his economic advisors will closely monitor the Greek crisis and its headway in the days to come. The leaders decided to stay in close communication till some progress is made.
Greek PM Tsipras has also said he believed that the international creditors have no intention of strengthening Greece’s prospects to leave the eurozone, which will result in a huge blow across the euro.