Greece’s Prime Minister Alexis Tsipras has offered new concessions to the country’s creditors.
A letter to creditors sent by Mr Tsipras says he was prepared to accept most conditions that were on the table before talks collapsed and he called a referendum.
On Tuesday, eurozone finance ministers refused to extend the previous bailout.
But Germany says a new agreement on a bailout would not be possible until after the referendum this weekend.
Human rights body the Council of Europe has said the referendum, which will ask Greeks if they want to accept their creditors’ proposals, would “fall short of international standards” if held as planned on Sunday.
The body’s Secretary General Thorbjorn Jagland told AP that the fact the vote “has been called on such a short notice… is a major problem”, and criticised the lack of clarity in the question to be put to voters.
The letter to creditors shows that Mr Tsipras was prepared to accept a deal put forward last weekend, if a few changes were agreed.
Greece’s national broadcaster ERT says Mr Tsipras would accept a deal with only minor requests for changes.
European markets surged on the news Greece might be willing to accept a deal.
But the German chancellor, Angela Merkel, said no new bailout talks would be possible before Greece holds Sunday’s referendum.
Lenders’ proposals – key sticking points
- VAT (sales tax): Alexis Tsipras accepts a new three-tier system, but wants to keep 30% discount on the Greek islands’ VAT rates. Lenders want the islands’ discounts scrapped
- Pensions: Ekas top-up grant for some 200,000 poorer pensioners will be phased out by 2020 – as demanded by lenders. But Mr Tsipras says no to immediate Ekas cut for the wealthiest 20% of Ekas recipients
- Defence: Mr Tsipras says reduce ceiling for military spending by €200m in 2016 and €400m in 2017. Lenders call for €400m reduction – no mention of €200m
Two key meetings are to take place to discuss aid for Greece, after Athens missed the deadline for a €1.5bn (£1.1bn, $1.7bn) payment to the IMF on Tuesday.
In one, officials with the European Central Bank (ECB) will decide whether to grant an emergency loan to Greece.
In the second, eurozone finance ministers will discuss Greece’s latest proposal for a third bailout. It would last two years and amount to €29.1bn.
Ministers will discuss the proposal in a conference call at 15:30 GMT.
With the eurozone bailout expired, Greece no longer has access to billions of euros in funds.
Only three other countries are still in arrears to the IMF – Sudan, Somalia and Zimbabwe. Between them, they owe €1.6bn, only marginally more than Greece.
The ECB has also frozen its liquidity lifeline to Greek banks, that did not open this week.
Withdrawals from cash machines are capped at just €60 a day and long queues have been forming outside banks.
However, up to 1,000 branches re-opened on Wednesday to allow pensioners – many of whom do not use bank cards – a one-off weekly withdrawal of up to €120.
The Associated Press news agency said many pensioners had waited outside banks from before dawn, only to be told to return on Thursday or Friday.
Some pensioners were told their pensions had not yet been deposited, AP said.
“It’s very bad,” said Popi Stavrakaki, 68. “I’m afraid it will be worse soon. I have no idea why this is happening.”
Close to 300 pensioners marched on the Bank of Greece in Athens after being given only a small sum from banks in the morning instead of the entire €120.
Analysis: Gavin Hewitt, BBC News, Athens
In making his calculations, the Greek Prime Minister Alexis Tsipras should be under no illusions: the rest of the eurozone wants him out.
When he unexpectedly sprung a referendum on his European partners, they were outraged and quickly ended negotiations.
Now in places like Berlin, Madrid and Helsinki, they spy an opportunity to rid themselves of a troublesome leader.
Inside the prime minister’s office at Maximos Mansion, there are reports of disputes and sharp arguments. There is a growing awareness of the size of the gamble, of the high risks they have embraced.
That is why it was not entirely unexpected – as happened today – that it was revealed that Mr Tsipras had sent a letter to Brussels accepting the bailout offer of June 28 with relatively minor conditions.
In recent days, Mr Tsipras seemed to understand his political future was on the line.
The European Commission – one of the “troika” of creditors along with the IMF and the ECB – wants Athens to raise taxes and cut welfare spending to meet its debt obligations.
Greece’s left-wing Syriza government, elected on an anti-austerity platform, has been in deadlock with its creditors for months over the terms of a third bailout.
Last weekend, the Greek government took the unilateral decision to hold a vote, angering eurozone ministers.
EU leaders have warned that a ‘No’ vote would see Greece leave the eurozone – though Mr Tsipras says he does not want this to happen.
A poll by the Greek newspaper Efimerida ton Syntakton published on Wednesday suggested that 54% of Greeks would vote against the creditors’ terms for a bailout – fewer than in their last poll.
Greece’s cash trap – Dimitris Katsikas, Hellenic Foundation for European and Foreign Policy
The economy is frozen and we’re in a liquidity trap, where everyone wants to hold euros.
Investment is non-existent and consumption has collapsed.
People have stopped submitting tax income statements and with the banks closed the government cannot receive anything. Supermarkets don’t know what to do with the cash they receive.
We are not in the eurozone bailout programme so the European Central Bank cannot increase funding to the banking system.
Credit agencies have reduced the ratings on Greek banks so they’re almost junk and even if they have collateral to give they may not be able to get new funding. Plus, we are essentially in default of the IMF.
Even if there is a deal, capital controls will be here for some time because there would be a rush on the banks if they re-opened.
An interim solution would only calm the symptoms of the crisis. Under a more permanent deal difficulties would remain for some weeks.
What happens next?
1 July – Eurogroup – the finance ministers of the eurozone – holds a telephone conference to discuss new proposal from Greek Prime Minister Alexis Tsipras
5 July – Referendum on creditors’ proposals takes place, which many say is effectively a vote on Greek membership of the eurozone
20 July – Greece must redeem €3.46bn of bonds held by the European Central Bank. If it fails to do so, the ECB can cut off Greece’s access to emergency loans
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