Greek Government Offers Last-Minute Plan To Avoid Default On the day it is due to miss a crucial payment to the International Monetary Fund, Greece made a last minute appeal to the European Union to restart talks about how to deal with the country's debts.
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Greek Government Offers Last-Minute Plan To Avoid Default

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Greek Government Offers Last-Minute Plan To Avoid Default

Greek Government Offers Last-Minute Plan To Avoid Default

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We begin this hour in Greece, where that country's bailout program from the EU and the IMF has now expired. Greece has also failed to make a payment on a separate IMF loan - the first European country to do that. The Greek prime minister is asking Europe for a new aid program and an extension of the current one. So let's go to Athens to talk to reporter Joanna Kakissis about all of this.

Hello, Joanna.


SIEGEL: And first, how much aid is the prime minister asking for now?

KAKISSIS: Well, Prime Minister Alexis Tsipras wants about 29 billion euros - that's about $32 billion - and that's in emergency loans to help cover the country's debts over the next two years. He's also asked for the country's existing debts to be restructured. He's been arguing for a long time that Greece just cannot pay back its enormous debts as the economy is contracting. He says it needs some kind of debt relief in order to do so, so this was a surprise decision considering how poisonous his tone has become towards European leaders since Friday. And that's when he broke off negotiations with eurozone and IMF lenders. And it appeared to blindside European leaders by calling referendum on what is essentially a draft credit deal.

SIEGEL: Yeah, and that referendum is coming up on Sunday. Is that a sign of desperation?

KAKISSIS: Some analysts certainly think so. They think Prime Minister Tsipras has painted himself into a corner with this referendum. He's isolated himself from other eurozone leaders. And because the negotiations have broken down, the Greek central bank was forced to close banks and limit withdrawals, and that's caused a lot of anxiousness.

SIEGEL: Well, is his proposal for the restructuring of the debt and the emergency aid, is that likely to go anywhere?

KAKISSIS: You know, no. It really can't, at least for now. Dutch Finance Minister Jeroen Dijsselbloem, he's head of the eurozone finance ministers, he called an emergency teleconference to discuss the request. But German Chancellor Angela Merkel, she's really the dealmaker here. She said that any new bailout package cannot be considered before the Greek referendum is held on July 5. That's this coming Sunday. Chancellor Merkel and other eurozone leaders are hoping Greeks will vote yes on the referendum. To them that means that Greeks want to stay in the eurozone.

SIEGEL: And what happens if most people vote no?

KAKISSIS: Well, I fear that that means a Greek eurozone exit is all but certain. A no on the referendum is going to mean a no to the eurozone. That's what European leaders are going to hear. A yes vote would be problematic for the government because they have already rejected the reforms pushed by the eurozone in exchange for loans. Prime Minister Tsipras has even hinted he will resign if the yes votes win.

SIEGEL: And how - Joanna, how would you describe the mood in Athens today?

KAKISSIS: You know, there was this big pro-euro rally tonight and it got rained on. Even the weather doesn't seem to be agreeing with the pro-eurozone crowd here. And despite, you know, the banks being closed indefinitely, people seem remarkably calm. It's only once you start talking to them that you will see how really nervous they are. Shop owners are hoarding cash. People's credit cards, if they are tied to Greek banks, there are reports that some of those cards aren't working.

You know, there are a few Greeks who talk really fondly about the country's previous currency, that's the drachma. They call it the drachmoula, like it's their loved one. It reminds them of a time when they had some control over their fate. But you know, many Greeks also equate the drachma with poverty and with isolation, and that's where they fear they're headed right now.

SIEGEL: OK. That's Joanna Kakissis in Athens.

Thanks Joanna.

KAKISSIS: You're welcome Robert.

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