Greece Asks For Two-Year Rescue Deal

Greece has submitted a proposal to creditors for a two-year rescue deal just hours before Athens is set to default on a loan to the International Monetary Fund.

The proposal was announced in a statement released by the office of Greece's Prime Minister Alex Tsipras.

"The Greek government proposed today a two-year deal with the ESM (European Stability Mechanism) to fully cover its financial needs and with parallel debt restructuring," it said.

The statement added that Greece "remains at the negotiating table" and that Athens will always seek "a viable solution to stay in the euro".

The announcement comes as German Chancellor Angela Merkel told lawmakers she did not expect any new developments on solving the deadlock today.

Mrs Merkel also said the consequences of the Greek crisis could be cushioned well and there was no need to fear the effects on the eurozone.

The comments appear to dash hopes of a last-minute deal before the bailout programme expires.

Mr Tsipras admitted on Monday night that his country is unlikely to meet the debt .

But in an interview with Greek TV, he remained defiant and rounded on the European Central Bank's decision not to raise its funding limit for Greek banks.

"How is it possible the creditors are waiting for the IMF payment while our banks are being suffocated," he said.

European leaders have warned that a referendum planned for Sunday is not about taking a bailout, but about Greece's future in the monetary union.

As the financial crisis deepened, it was confirmed that banks and the country's stock exchange would remain shut until 7 July, and the daily limit on withdrawals from cash machines would be limited to just €60.

Concerned British tourists who are heading to Greece have been told the ATM limits will not apply to foreign debit cards - but in practice, some cash machines may not be able to tell the difference.

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