Feb 19, 2015 5:41 AM

Greece sends bailout compromise proposal to its creditors

The Associated Press

ATHENS, Greece (AP) Greece requested Thursday a six-month extension in its rescue loan agreement but not the associated budget measures in a last-moment bid to break a deadlock with European creditors over its bailout program and end uncertainty over its future in the euro.

Dutch Finance Minister Jeroen Dijsselbloem said the 19 eurozone finance ministers whose meetings he heads would convene in Brussels on Friday, four days after the latest talks on the Greek bailout collapsed.

Thursday's request was made "to provide a protection umbrella for (Greece's) banking system," a government official said.

Speaking on customary condition of anonymity, he said the extension would concern the loan agreement that has kept Greece from bankruptcy since 2010, and whose main component expires in nine days.

But the official said Athens is not requesting an extension of the spending cuts, high taxation and reforms that have been a key condition of the bailout program but pushed the economy deeper into depression and record-high unemployment.

Eurozone countries had given Greece until Friday to accept both an extension to its loans program and its budget austerity measures.

Greek shares were up 1.5 percent on the news in midday trading, while the Euro Stoxx 50 index was flat.

Government spokesman Gavriil Sakellaridis said earlier Thursday that Greece is doing everything it can to reach a speedy and mutually acceptable deal with the other 18 European countries that use the euro.

The European part of Greece's bailout expires on Feb. 28. If no deal is reached by then, the European Central Bank would face increased pressure from eurozone governments to cut off emergency financing for Greek banks.

That could place so huge a strain on the country's financial system that the government might be forced to print its own currency and leave the euro a worst-case scenario for all sides. European countries could be stuck with losses on their loans to Greece, which would suffer terribly, at least in the short term.

A new Greek currency would immediately drop in value, pushing up the cost of fuel and key consumer goods, most of which are imported. That would take a terrible toll on a society where poverty levels have surged, the average income has fallen by at least a third and one in five workers are unemployed mostly long-term.


--  Dealing with the Disease of Addiction? Click here for help --

More from NH1.com

NH1 News Debates
NH1 News Replay

NH1 on Twitter

NH1 SkyView Cameras

NH1 on Facebook

Check out NH1 News Rail Polls on LockerDome on LockerDome