Clock ticking for Greece

07 July 2015 - 02:03 By Bloomberg

Greece's creditors turned up the heat on Prime Minister Alexis Tsipras to come with a plan to stay in the euro, as banknotes became more scarce and the nation was forced to extend capital controls. After voters emphatically endorsed Tsipras's call for a "no" to more austerity in Sunday's referendum, European finance ministers are waiting for a proposal to re-start bailout talks. Tsipras and the leaders of three opposition parties said in an unprecedented joint statement they all supported efforts to seal a deal.The onus is on Greece to act quickly to avoid a meltdown of its banks, which the government said will now remain shut through tomorrow. German Chancellor Angela Merkel and French President François Hollande are due to meet other euro-region leaders today as the crisis escalates, while the European Central Bank is also evaluating its next moves to prevent the country's impending financial calamity.Financial markets were more sanguine about Greece's fate. The euro was down 0.4% to $1.1069 at 4.40pm in London. The Stoxx Europe 600 Index fell 1.2%, compared with a drop of 3.2% a week ago when Tsipras introduced capital controls and closed banks.The problem for Tsipras is that the muted response from investors was matched by European leaders showing no immediate willingness to compromise. Merkel's chief spokesman, Steffen Seibert, said no resolution was imminent. A deal within 48 hours would be "difficult to achieve," he said."In the next couple of days we'll see whether there is sufficient trust and the political opportunity to find a solution," Jeroen Dijsselbloem, president of the group of euro- region finance ministers, told reporters in The Hague. "That has to be looked at. It's not so easy to close a door."In a bid to speed up the process, Greek Finance Minister Yanis Varoufakis said he was stepping down after more than five months of confrontation. He was replaced by Deputy Foreign Minister Euclid Tsakalotos, a trusted party hand who has been more involved in negotiations as Varoufakis took a back seat. Varoufakis said his departure was intended to bolster Greece's position after a larger-than-forecast 61% of voters rejected further austerity."Tsipras's margin of victory and Varoufakis's resignation strengthens his hand in the upcoming negotiations," Marchel Alexandrovich, senior European Economist at Jefferies Group, said. "Now it is up to Merkel and Hollande to decide whether to let Greece go, or to offer a better deal than was on the table 10 days ago." Paddy blows itPaddy Power said it was left "red-faced" after paying out early to gamblers who incorrectly bet that Greek voters would back an austerity referendum.Ireland's biggest bookmaker "paid out five figures" in winnings on July 1, days before Greece rejected austerity, with 61% of the vote. ..

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