Greek prime minister Alexis Tsipras will present new reform proposals at a eurozone emergency summit today following the country’s rejection of austerity cuts, the BBC reports.
The plan is set to include a demand for Greece’s £228bn debt to be slashed by almost a third (30 per cent). It comes after a dramatic 48 hours for the embattled nation during which Greek citizens rejected the latest international bailout terms, leading finance minister Yanis Varoufakis to resign his post.
Varoufakis has been replaced by Euclid Tsakalotos.
In a statement issued yesterday, Chancellor George Osborne said Greek banks, which have been closed to prevent depositors withdrawing large swathes of cash, “are likely to remain closed until the Greek government is in a position to re-open them”.
Addressing the House of Commons, Osborne said: “The Greek people expressed a decisive view in yesterday’s referendum and rejected the creditors’ terms.
“Greece is a proud nation and a very long-standing ally of the United Kingdom, and we respect the decision of its people, but there is considerable uncertainty about what happens next. We need to be realistic: the prospects of a happy resolution of the crisis are, sadly, diminishing.”
He added that if negotiations today fail to show significant signs of progress the financial situation in Greece could “deteriorate rapidly”.
“So far the financial market reaction has been relatively contained, private sector exposures are far less than three years ago, and the eurozone authorities have said that they stand ready to do whatever is necessary to ensure the financial stability of the wider euro area. But the risks are growing, so it is right that we remain vigilant and monitor the situation carefully.
“I am in regular contact with the Governor to oversee developments as they unfold.”