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Greece Offers a Proposal as Time Limit Runs Out

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A bank manager explains the situation to pensioners waiting outside a branch of the National Bank of Greece hoping to get their pensions, in Thessaloniki, Greece.
A bank manager explains the situation to pensioners waiting outside a branch of the National Bank of Greece hoping to get their pensions, in Thessaloniki, Greece.

Greece has made a proposal shortly before it was about to default on a loan payment and European leaders agreed to consider it in an emergency conference call on Tuesday.

The country's leaders had said it is not able to make a payment of $1.8 billion to the International Monetary Fund. But the office of Prime Minister Alexis Tsipras said his government is proposing a two-year deal to avoid default. It says Greece is offering to "fully cover" the country's financial needs with the simultaneous restructuring of debt."

Jeroen Dijsselbloem is the President of the Eurogroup. He said the finance ministers of countries using the euro would discuss the Greek proposal during a teleconference late Tuesday evening.

In Washington, President Barack Obama said the Greek financial crisis is "an issue of substantial concern," but more for Europe than the United States. Mr. Obama said the U.S. does not believe the financial turmoil will result in "a major shock" to the American economy.

Greece and its creditors have held heated negotiations for weeks. Talks ended last weekend with no agreement. And the financial situation in the country has grown worse.

Mr. Tsipras went on national television Sunday to announce a six-day bank closure and cash restrictions. He spoke hours after the European Central Bank said it would not continue an emergency loan program that had permitted Greek banks to remain open in recent weeks.

Prime Minister Tsipras also announced a plan to hold a referendum, or popular vote, in Greece on July 5th. The vote would let the Greek people decide whether to accept international creditors' latest demands in exchange for new loans.

Greece's creditors are demanding continued financial reforms before releasing billions of dollars from a financial rescue package. The plan has helped Greece pay its debts, but the country has been in recession for years.

Mr. Tsipras urged a "no" vote in the referendum. However, European leaders said rejecting reforms would amount to Greece withdrawing from the Eurozone and politically leaving Europe.

Greek banks remained shut on Tuesday, and its stock market closed.

The Greek finance ministry said it would open about 1,000 bank branches across the country to permit people receiving pensions to withdraw enough money to get through the week.

Mr. Tsipras said Monday he will respect the outcome of Sunday's referendum. But he warned that his far-left government will not be the one to carry out the new reforms. While Mr. Tsipras spoke on national television late Monday, protesters demonstrated in Athens against additional financial cuts.

Ken Bredemeier reported this story from Washington. Mario Ritter adapted it for VOA Learning English. Hai Do was the editor.

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Words in This Story

default –n. failure to make a payment

turmoil –n. a state of confusion or disorder

referendum – n. a popular vote on a specific issue or law

pension(s) –n. a payment plan operated by a government or company that pays retirees

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