Greece's creditors draw up new deal as Athens vows not to be blackmailed

Rumours swirl that Greece could hold elections if it cannot reach an honourable compromise with its lenders, who are sending a new proposal to Athens on Wednesday.

• Latest: Greek PM to visit Brussels on Wednesday night
• Tonight: The plan is ready (but what is it?)
• Summary: Political deal by Friday
• Greek PM says leaders must decide
• Greek rumour mill: June elections?
• Last Night: Drama in Berlin - as it happened

10.36pm BST

Alexis Tsipras's decision to head to Brussels on Wednesday night suggests he's not prepared to accept the creditors' new proposals without a fight.

By meeting Jean-Claude Juncker, Tsipras may be hoping to get support for his own 47-page list of proposals, rather than cave in (or be seen to cave in) to the former Troika...

10.24pm BST

The financial markets, incidentally, are pricing in an eventual Greek debt restructuring, sooner or later.....

Greek PM Tsipras to present #Greece's proposal to EU's Juncker in Brussels on wed as 10yr default probability at 95%. pic.twitter.com/L9eZCnsni2

10.07pm BST

Just when we thought things were over...... Athens journalists are reporting that prime minister Alexis Tsipras will visit Brussels tomorrow.

He'll be carrying the Greek proposal to end the deadlock, rather than the one being sent by creditors to Athens tomorrow.....

#Greece PM #Tsipras 2 meet with #EC President @JunckerEU in BXL 2morrow.

Tsipras going to Brussels Wed, taking Greek proposal with him, after invite by Juncker, gov source says. Mtg Wed night

9.17pm BST

OK, events really seem to have calmed down for the night, so I'm going to wrap up here. Big day tomorrow, when we learn how the offer crafted by Greece's lenders goes down in Athens.

Will it be acceptable to the Athens government, paving the way to unlock bailout funds and avert a default that could rock Europe to its core? Tune in on Wednesday to find out..... GW

A good laugh. #Greece #Grexit #Brexit pic.twitter.com/nFwwiiCxVx

8.38pm BST

Our Athens correspondent, Helena Smith, sums up the situation tonight:

Related: Greece's creditors rush to finalise 'take it or leave it' debt offer

8.15pm BST

A full moon is rising over Athens tonight. A good omen?....

#fullmoon on in #Greece https://t.co/31aMNJ9uHF

IIIIIIII^1 III IIII^3III.. pic.twitter.com/uWaY6pOgmm

8.12pm BST

Reuters is now also reporting that the ECB, IMF and EC have agreed a cash-for-reforms proposal to put to Greece on Wednesday (as Peter Spiegel tweeted earlier)

7.40pm BST

PPS: Christine Lagarde is expected to brief the IMF board about the situation in Greece, having jetted back across the Atlantic following the Berlin talks.

She'll need good answers about Greek debt sustainability, and the prospect of the Fund receiving its a1.6bn this month.

IMF chief Lagarde is likely to face more questions about the the fund's eroding credibility when she briefs the board on Greece later today.

Extra #IMF Board meeting on #Greece with Lagarde briefing on yesterday's 5-party meeting & institutions' proposal (via @pitrofos4 & @skaigr)

6.50pm BST

PS: The latest word from Brussels is that creditors have completed a deal to present to Athens on Wednesday, the FT's Peter Spiegel reports.

That means technical teams have finished their work, which was prompted by last night's emergency meeting in Berlin.

Technical teams from #Greece's creditors completed text of bailout deal this afternoon; presentation tomorrow.

6.23pm BST

With Monday's late night meeting but seemingly no proposals yet agreed by either Greece or its creditors, investors continue to be nervous as the clock ticks down towards the country running out of money. With eurozone inflation coming in higher than expected, there was also the concern that the ECB's supportive bond buying programme might end sooner than anyone anticipated. So markets had another nervous day, with the final scores showing:

6.14pm BST

Over in Athens, the minister of state Nikos Pappas has also racheted up the pressure this afternoon describing the proposal the Greek government has made as "complete, unified and solid," reports our correspondent Helena Smith.

"Greece last night officially submitted a text of proposals to the institutions that were complete, unified and solid just as the decision on the 20 February called for," said the minister referring to the decision of creditors to extend Greece's current bailout until the end of June.

6.10pm BST

#ELA cash buffer remains unchanged at a3 bln, decision on higher collateral haircut postponed again. #Greece #ecb https://t.co/7ca8TMLTBU

6.00pm BST

More support for Greece from the European Central Bank (ahead of tomorrow's meeting) it would appear:

#ECB said to raise Greek ELA ceiling to a80.7bn, BBG reports.

4.49pm BST

And another suggestion the two sides - Greece and its creditors - remain some way apart in their separate proposals:

Greek source just told me: "Both sides have tabled completely irreconcilable proposals" Here's our story: https://t.co/uLNKdEPVMA

4.36pm BST

Here's the latest summary from Reuters about the state of play between Greece and its creditors:

Greece's creditors are close to finishing a draft agreement to put to the leftist government in Athens, a source close to the talks said on Tuesday, injecting new momentum into long-running negotiations to release aid for the cash-strapped country.

EXCLUSIVE: EC/IMF TO SUBMIT 'POLITICAL' AGREEMENT TO GREECE - SOURCES

PROPOSAL TO ASK GREECE TO NEGOTIATE WITHIN ITS FRAMEWORK

PROPOSAL LACKS CONSENSUS ON PENSIONS, DEBT SUSTAINABILITY

Asked whether the creditors also discussed a possible 'plan B' in case #Greece rejects their proposal, an EU source said "Yes" ~MNI

4.30pm BST

Greek official sources saying they will definitely make the IMF payment this Friday

3.55pm BST

Eurobank estimates #Greece funding gap at a10-15 bln until 2016, assuming disbursement of pending bailout tranche of a7.2 bln. #ec #imf

3.54pm BST

The US concern about the situation in the eurozone has been reinforced by a speech in Washington by Federal Reserve board member Lael Brainard. Although mostly about the US economic outlook and the implications for monetary policy, one of the points Brainard mentions involves the eurozone:

Recently, the euro area has seen some encouraging data on retail sales, industrial production, and inflation, auguring well for some sustained improvement in aggregate demand within the euro area. Nonetheless, there remain risks and uncertainties surrounding foreign growth that could prolong or intensify foreign headwinds going forward.

Most immediately, negotiations between Greece and its creditors are challenging, and the risk of further deterioration cannot be ruled out. While the euro area has broadened its policy toolkit and most member states have made significant strides in building resilience in the past couple of years, the recovery is still fragile in several member states, and vulnerabilities to financial stresses remain.

3.30pm BST

A quick recap....

The Greek bailout crisis is rattling towards a crescendo, as its creditors scramble to put the finishing touches to a proposal to send to Athens - possibly by the end of the day.

The radical Greek prime minister, Alexis Tsipras, and his governing hard-left Syriza movement "is underestimating unity in the rest of the EU," said a senior EU official involved in five years of negotiations with the Greeks.

"That will probably cause default or breakdown. No one is trying to prevent it anymore."

"We are not waiting for them to submit a proposal, Greece is submitting a plan - it is now clear that the decision on whether they want to adjust to realism ... the decision rests with the political leadership of Europe."

Yannis Stournaras, Governor of Bank of Greece: Nobody has a mandate for #Grexit, either by accident or on purpose.

Incredible #euro rally. Now up >2%, among its 10 biggest rallies (ex-Lehman period volatility) since launch in 1999: pic.twitter.com/LWq1HrX1Yx

@ManosGiakoumis Dijsselbloem seems to be saying the exact opposite: http://t.co/MnhnDO8Tss

2.45pm BST

What does Dijsselbloem mean by saying a Greek deal is 'not theoretically possible this week'?

He's probably concerned that any deal would need to be signed off by his eurogroup, which next meets on June 18. Some European parliaments may also want a vote.

Eurogroup Chief Dijessbloem says agreement with #Greece unlikely this week (@RANsquawk) - note he was not at the late night Berlin meet...

2.32pm BST

Oh dear. Jeroen Dijsselbloem, the Dutch finance minister who chairs the eurogroup of finance minister, has just dampened our hopes.

#Eurogroup's Dijsselbloem says that there is progress in Greek talks but not sufficient. It's not right to think that we can meet half way.

2.26pm BST

Over in Athens the government is still insisting that it has had no contact with creditors since the 5-way meeting of institutional heads, the EU president and German and French leaders last night, reports Helena Smith.
In a tersely worded statement, prime minister Alexis Tsipras' leftist led coalition announced:

"The Greek government has not received an agreement plan from the institutions, nor has there been contact between the prime minister or some other official of a government with corresponding officials from the institutions."

2.18pm BST

There is growing angst in the eurozone's corridors of power about the looming ultimatum for Greece, reports our Europe editor, Ian Traynor.

Last night's emergency talks in Berlin have shown that a political deal will be needed, but the failure of creditors to reach a common position is causing alarm:

In Brussels and eurozone capitals, there is a strong sense of foreboding that the extreme brinkmanship on both sides is careering out of control and will end badly.

The radical Greek prime minister, Alexis Tsipras, and his governing hard-left Syriza movement "is underestimating unity in the rest of the EU," said a senior EU official involved in five years of negotiations with the Greeks. "That will probably cause default or breakdown. No one is trying to prevent it anymore."

"Belgian, Finnish, Dutch opinion is hardening. The Germans are actually the softies compared to the Slovakians and Estonians."

1.52pm BST

This episode of the Greek crisis will probably end with another helping of EU fudge, writes our economics editor, Larry Elliott.

After all, a Grexit is too alarming and Athens remains unwilling to cave in:

Greece does not want to leave the euro. Merkel does not want to be the politician held responsible for derailing the European project. So there is a temptation to do what Europe has done throughout its six-year sovereign debt crisis: play for time.

This would involve Greece's creditors providing bridging finance that would allow Tsipras to meet the series of debt repayments due this summer and for a referendum to be held on whether the Greeks believe yet more austerity is a price worth paying for staying in the euro.

Related: Greece bailout talks: an intractable crisis with three possible outcomes

1.20pm BST

So if Greece's lender are nearly ready to fire over a proposal to Athens, what timescale are we looking at?

The FT's Peter Spiegel reports that the IMF, ECB and EU have 'narrowed their differences', and hope to agree a final text outlining what is expected from Athens by the end of Tuesday.

The IMF remains sceptical and continues to seek assurances that eurozone governments would agree to restructure Greek debt - mostly now held by EU creditors - if a credible reform programme is not agreed and the targets are not met.

#Greece's creditors hoping for political deal by Fri; staff-level agreement next wk. Also weighing bailout extension http://t.co/lGAgDhIrU7

12.44pm BST

The euro has jumped on reports that Greece's creditors are close to agreeing a proposal to send to Athens.

It's a confusing picture (as so often!); Reuters is hearing that a draft deal is almost ready.

Greece's creditors have reached a consensus on the terms of a proposed deal to put to the Greek government, according to two people familiar with the talks.

Officials representing European institutions and the International Monetary Fund on Tuesday morning completed the draft of an agreement to unlock bailout aid for Greece, after key European and IMF leaders met in Berlin late Monday to overcome differences between Greece's creditors, they said.

Greece's creditors agree on proposed deal to submit to Athens. Tough times ahead for Tsipras http://t.co/yru2Ibpyx8 my story via @WSJ

12.12pm BST

Speculation about elections at the end of June continues to swirl in Greece, this time from the junior member of the country's coalition:

#Greece junior coal partner ANEL's spox sees elections on June 28th. (It's the 2nd time he alludes to elections) https://t.co/1h7wzabpAl

11.52am BST

Many papers are being exchanged between Athens and its creditors, says European Commission spokeswoman Annika Breidthardt.

She's taking the daily media briefing in Brussels right now, and was asked about these "comprehensive proposals" which Greece apparently whizzed over to the Berlin talks last night.

"The fact that docs r exchanged is a good sign" says @A_Breidthardt without commenting on specific doc sent from Athens 2Brussels last night

EU finally hails paperology: 'The fact that documents are being exchanged is a good sign', says @A_Breidthardt

"We're not there yet," says @A_Breidthardt on Greece talks.

11.33am BST

Looks like Alexis Tsipras got a warm reception from employees at the Greek education ministry this morning:

11.25am BST

EU insiders say the proposals sent by Greece last night weren't comprehensive enough....

Sources: Greek proposal didn't contain major new concessions on key issues such as pension and labour issues http://t.co/tDMBTpp8x5

11.16am BST

Greece's prime minister, Alexis Tsipras is insisting he's not prepared to be bounced into a deal by creditors.

The Syriza leader insists that his government sent "realistic" plans of its own to Berlin last night, which he urges them to back...

"We have submitted a realistic plan for Greece to exit the crisis....and end divisions in Europe.

"We are not waiting for them to submit a proposal, Greece is submitting a plan - it is now clear that the decision on whether they want to adjust to realism ... the decision rests with the political leadership of Europe."

@tsipras_eu says not waiting for proposal from creditors, Greece sent own 'comprehensive plan' ystdy. Seeks decision by EU political leaders

Tsipras's take on Monday's meeting in Berlin is that EU's political leaders came together to examine proposal made by Greek gov't #Greece

He is wrong #imho. https://t.co/xPR1zCTzkk

10.33am BST

Alexis Tsipras adds that he is optimistic that an agreement will be reached in time.

I believe European leader will respect our proposals, he tells his audience in the Athens education ministry.

10.22am BST

Back in Greece, prime minister Alexis Tsipras is speaking now - repeating that Europe's leaders are the only people who can deliver a solid agreement.

He also revealed that Greece sent a "comprehensive proposal" to its lenders last night [Tsipras held a cabinet meeting with top ministers on Monday evening].

Tsipras: "Greek people know that 'day after will be difficult' regardless of negotiations #Greece pic.twitter.com/pq0wq9kAaa

10.11am BST

The European Central Bank might have to revise its forecasts higher at tomorrow's monetary policy meeting, reckons Credit Agricole's Fred Ducrozet.

Eurozone HICP now *above* ECB's most optimistic scenario - staff forecasts to be adjusted slightly higher tomorrow. pic.twitter.com/BWW6GvumAg

10.07am BST

Breaking: Inflation across the eurozone has started rising again, and by more than many economists expected.

The eurozone consumer prices index, which tracks the cost of living across the euro area, rose by 0.3% in May, having been flat in April (and negative since January). The City had expected a reading of 0.2%.

#Eurozone back to #inflation: Consumer Prices rise for 1st time in 6months. May Core CPI also rose to 0.9%. pic.twitter.com/Onj0CRt9FO

9.56am BST

#Greece | Scores of Syriza ministers & MPs this am talk of snap elections "if compromise goes beyond our election program".

9.44am BST

There is much chatter in Athens this morning that the country could hold elections if Greece isn't given the "honourable compromise" that it wants, says our correspondent Helena Smith.

It is indicative of the mood in Athens this morning that even the mild-manned deputy premier Yannis Dragasakis has come out all guns. "As a government neither do we accept ultimatums not do we bow to blackmail," tweeted the ex communist who is now in charge of the anti-austerity coalition's economic policy.

I(C)I II...I^2IIIIIfI IIII IIIII1/4IIfII IIIIIfII^3IIII IIII I...IIIIIIII...I1/4I IfI III^2I^1IIfI1/4III #studydays

"If a deal is achieved that is not deemed honourable and promoting of compromise, the people will have to be asked before we sign it."

9.34am BST

After a calm start, Europe's stock markets have just fallen into the red, with the FTSE 100 shedding 0.8% or 55 points.

"The fact that five such political and financial heavyweights met about Greece means they are trying to force a break in the political deadlock and that's a positive development that's likely to lift risk sentiment. But we will have to wait to see the Greek reaction."

9.03am BST

Germany's minister for Economic Affairs, Sigmar Gabriel, is urging Greece to "embrace" its creditors efforts to reach a deal and avoid bankruptcy:

8.58am BST

Just in: Germany's unemployment total has fallen by another 6,000.

That leaves the country's jobless rate at its record low of 6.4%.

GERMAN UNEMPLOYMENT FELL 6,000 IN MAY VS EST. 10,000 DROP

8.28am BST

A Greek official has told Reuters that Athens hasn't yet received any text or document from its creditors following last night's meeting.

Greece is confident it can meet its next debt repayment, a300m to the IMF on Friday, as long as it has an agreement with creditors (even if new funds haven't been released).

#Greece will make June 5 #IMF payment if deal with lenders reached. http://t.co/Aqkspfrnk5 pic.twitter.com/ZurqXJxOEP

8.21am BST

Over to Spain's briefly...and the country's unemployment crisis has eased a little.

The number of people out of work fell by almost 118,000 in May, a slightly bigger drop than expected. That brings the total out of work down to 4.215m.

Spain unemployment fals 118k v -115k expected ..... compare that with France where it is still increasing.

8.18am BST

European commissioner Pierre Moscovici has just revealed that Greece has offered new proposals on pensions reforms.

He told France Inter radio that:

"We are starting to work in depth on pensions. The Greek government has made some first proposals and the pros and cons are being considered."

8.10am BST

There are plenty of rumours and theories swirling this morning, about what the heads of Germany, France, the IMF, ECB and EC discussed last night. Here's a few:

Merkel, Hollande and Draghi obviously ready to offer debt relief to #Greece conditional on structural reforms, says @TomMayerEuropa

Spanish radio @La_SER: Creditors plan to offer #Greece access to a10,9bn bank funds if Tsipras accepts 70% of program http://t.co/92jzxUgYs2

If #Greece accepts creditors' plan, third bailout program to be discussed in the summer together with new funds for Greek banks ~@La_SER

8.03am BST

Nikos Filis, the parliamentary spokesman of Prime Minister Alexis Tsipras's ruling Syriza party, insists Greece will not be bounced into a 'take it or leave it' offer from its creditors.

"If we're talking about an ultimatum... which is not within the framework of the popular mandate, it is obvious that the government cannot co-sign and accept it."

8.00am BST

Greece's labour minister, Panos Skourletis, has warned that Athens cannot make more compromises.

Any concessions must come from the Greek creditors, he argued, as part of a 'political deal'.

"There is no room for more compromises. We are waiting for the other side to assume its responsibilities."

7.56am BST

Merkel, Lagarde, Draghi, Hollande and Juncker worked on a technical paper last night prepared by the commission, showing possible ways of reaching a deal , according to the Financial Times.

One official said there were no new concessions to Athens in the commission paper. Rather, it was intended to spell out the core principles creditors need to conclude a deal. Yanis Varoufakis, the Greek finance minister, has long argued that Athens accepts 70% of the existing bailout programme, and creditors are hoping any compromise reached in Berlin could serve as the 70% Mr Varoufakis and Mr Tsipras can accept.

Officials cautioned that the final creditor position may need to be fleshed out in the coming days, but their intention would be to present it to Athens this week.

7.50am BST

European commissioner Pierre Moscovici says he's hopeful of a breakthrough with Greece, but warned that more work is needed.

Speaking on France Inter radio a few minutes ago, Moscovici said:

"The discussions are fruitful, they are bearing fruit, there is real progress with a better understanding by both the Greek government and its creditors."

"In the coming weeks we have to find a solution, I think we are doing it but efforts still need to be made on both sides."

"Etre dans la zone euro, c'est un ensemble de droits et de devoirs. Je souhaite ardemment que la #Grice reste ds la #zoneeuro" @franceinter

7.45am BST

Last night's Berlin gathering may have been triggered by growing pressure from America to resolve the Greek crisis, says our Europe editor Ian Traynor.

#grexit merkel's mini-summit. seems she doesn't want a friday drama to spoil her weekend G7 summit in bavaria. americans restive

7.39am BST

Good morning, and welcome to our rolling coverage of Greece's bailout and other events across the world economy, the financial markets, business and the eurozone.

The Greek crisis has stepped up another notch overnight after German chancellor Angela Merkel held an unscheduled emergency meeting in Berlin.

Related: Greece's creditors urge more intensity after mini-summit - live updates

"The endgame is beginning. The meeting is aimed at making the Greeks a final offer."

"They agreed that work must continue with real intensity,"

"The participants in the talks were in close contact in recent days and want this to remain the case in the coming days both among themselves and of course with the Greek government."

European leaders call to "intensify" Greece talks after late-night emergency session http://t.co/LflD1QY0nJ pic.twitter.com/mzpkNCr7pB

A decline of 115k is expected in Spain which is likely to be most welcome given the current governments unpopularity, but it will still have to go some to make any sort of dent in the current 23% unemployment rate. German unemployment is set to stay at a record low of 6.4%.

French unemployment rises 0.7% in April to historic high (a staggering +21% since May 2012!)) http://t.co/oNNgYQUKQl pic.twitter.com/A1TjOxDkEB

The economy may be growing, but so are the numbers out of work: France 2 News leads with dire unemployment figures pic.twitter.com/Y6mMNqg6Se