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Greece Chaos Continues After Default

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Confusion refuses to die down in Europe even after crucial deadlines were missed and hapless Greeks stare into an uncertain future for their country, while other Europeans try to preserve the sanctity of the union and the euro.

Greek Prime Minister Alexis Tsipras offered an olive branch to creditors as the country reels under the pressure of capital controls and pension rations, among other woes.

In a letter sent late Tuesday to his country's creditors, Tsipras expressed willingness to accept almost all the bailout proposals put last week.

The letter was addressed to European Commission President Jean-Claude Juncker, International Monetary Fund Managing Director Christine Lagarde and European Central Bank Chief Mario Draghi.

The changes suggested by Tsipras include maintaining a 30 percent discount on sales tax for islands. He also sought a postponement of pension reforms until October.

Tsipras also said that the social solidarity grant for all pensioners, known as the EKAS, must be phased out by the end of 2019, but there will be no immediate impact on the top 20 percent of beneficiaries.

Greece's second bailout expired on Tuesday. The country also missed a 1.55 billion euro payment to the International Monetary Fund, making it the first developed country in recent history to default on a payment to the lender.

"Greece is now in arrears and can only receive IMF financing once the arrears are cleared," the Washington-based lender said in a statement on Tuesday.

IMF also acknowledged that it received a request from Greek authorities for an extension of the June 30th repayment obligation, which it said "will go to the IMF's Executive Board in due course".

In an address to the nation on Wednesday, Tsipras said the July 5th referendum on whether to accept or reject creditors' proposal was not about the country's euro membership and asserted that a 'no' vote did not mean an exit from the eurozone.

Tsipras also confirmed that the government will hold the referendum and once again asked Greeks to vote 'no', which he said would imply a return to European values and help to secure a viable and fairer deal.

He said Greece remains at the negotiating table and claimed better proposals were tabled after the announcement of the referendum. Deposits, salaries and pensions will not be lost, he added. Democracy is not a coup, Tsipras said.

Media reports citing sources had earlier suggested that the government may consider calling off the July 5th referendum.

European leaders, including German Chancellor Angela Merkel and French President Francois Hollande, have warned that a 'no' vote in the referendum would mean Greeks are rejecting Europe and opting to exit the Eurozone, dubbed the 'Grexit'.

Eurozone finance ministers rescheduled an emergency conference call to discuss Greece for 5.30 pm Brussels time from 11.30 am.

Elsewhere, the European Central Bank Governing Council is set to meet in Frankfurt to review the emergency liquidity assistance, or ELA, it provides to Greek banks. The bank had refused to raise the cap on its emergency liquidity assistance on Sunday after the Eurogroup rejected any bailout extension for Greece.

If the central bank decides to cut off the crucial lifeline, Greek banks could go belly up. But such a drastic decision is unlikely until July 20th, when the country has to pay 3.46 billion euros to the ECB to redeem the bonds the lender holds.

Bailout negotiations between Greece and its creditors broke down over the weekend after Tsipras called for the referendum on the country's bailout on Friday.

Meanwhile, in Berlin on Wednesday, Tsipras came under sharp criticism from German Finance Minister Wolfgang Schaeuble, who said the scene has changed dramatically after Greece defaulted on the payment and the expiry of the second bailout.

Further, any new bailout can be negotiated under the European Stability Mechanism and Schaeuble cautioned that the terms would be different from what they used to be.

There are no grounds for serious discussion with Athens, Schaeuble said. He also expressed doubt whether the Greek government will go ahead with the July 5th referendum.

Speaking to the Bundestag, Merkel said the door remains always open for talks with Greece but said any negotiations can take place only after the referendum.

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