The Latest: European stocks spike on Greek deal hopes
By The Associated Press, Associated Press
Jul 1, 2015 11:30 AM CDT
Pensioners stand in a queue outside a bank in Athens, Wednesday, July 1, 2015. About 1,000 bank branches around the country were ordered by the government to reopen Wednesday to help desperate pensioners without ATM cards cash up to 120 euros ($134) from their retirement checks. Eurozone finance ministers...   (Associated Press)

ATHENS, Greece (AP) — The latest news on Greece's financial woes (all times local):

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7:30 p.m.

European stock markets ended sharply higher following the publication of a letter from Greek Prime Minister Alexis Tsipras to the country's creditors indicating that his government was ready to accept a large chunk of their proposals.

In the letter sent Tuesday just before Greece's bailout with European creditors expired and the country failed to make a debt payment to the International Monetary Fund, Tsipras said Greece will accept the demands of creditors in a new program, bar a few changes.

Traders thought the letter could form the basis of a new deal. That view offset any disappointment at a subsequent televised address from Tsipras where he pressed on with Sunday's referendum on recent creditor proposals and that he was backing a 'no' vote.

The Stoxx 50 index of leading European shares ended up 2.1 percent.

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6:35 p.m.

A huge banner that urged Greek voters to reject a bailout deal from the country's creditors at Sunday's referendum has been taken down from the front of the Finance Ministry.

The banner, which faced the Greek Parliament and overlooked the Greek capital's central Syntagma Square, was several meters (yards) in size.

In Greek and English, it said 'No to blackmail and austerity."

Greek Finance Minister Yanis Varoufakis distanced himself from the banner. In a tweet, he claimed it was the initiative of trade unionists "who did not seek the Ministry's permission."

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6:24 p.m.

German Chancellor Angela Merkel is sticking to her position that there can be no negotiations on a new aid package before Greece holds its referendum.

"I have set out my position and I have nothing to add to it," she said after meeting with Italian Premier Matteo Renzi in Berlin.

Merkel says her personal relationship with Greek Prime Minister Alexis Tsipras hasn't suffered and that she backs "the right of a sovereign state" to make its own decision. However, she adds that it's equally right for other countries to have their own positions.

Earlier Wednesday, Merkel said there can be no new Greek deal until after the referendum, a viewpoint that contrasts that of French President Francois Hollande.

Renzi said he thinks a referendum is a "mistake" but that he respects the will of the Greek people.

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6:01 p.m.

Greek Prime Minister Alexis Tsipras said suggestions this Sunday's referendum will determine whether Greece stays in the euro were wrong.

"Whatever the circumstances, the Greek government remains at the negotiating table and will remain there until the end. And it will be there on Monday, immediately after the referendum with better terms for the Greek side," he said.

In his televised address, Tsipras rounded on those claiming he had a secret agenda to get Greece out of the euro. They "are telling a great lie," he said.

Tsipras also sought to assure Greeks, struggling with shut banks and daily withdrawal limits of 60 euros a day, he would do what he could to ensure the problems were short-lived.

"I provide my personal guarantee that I will do whatever is possible to make these difficulties temporary," he said.

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5:40 p.m.

Greek Prime Minister Alexis Tsipras has vowed to push on with his plan for a referendum this Sunday on the recent proposals from the country's creditors.

In a televised national address, Tsipras also reaffirmed his support for a "no" vote in the referendum. He insisted that a "no" vote would not put Greece's place in the euro or in the European Union at risk.

Tsipras said Europe must stop acting in an "undemocratic way" and sought to reassure Greeks that their bank deposits were safe.

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5:23 p.m.

Bank of England governor Mark Carney has warned that the outlook for Britain's financial stability has "worsened" because of the crisis in Greece.

Though Carney said at a briefing Wednesday that British banks and businesses only see "minimal" direct exposure to the Greek crisis, he said the British economy's exposure to the eurozone is "considerable."

Carney noted that HSBC was the only British bank actively involved in the Greek market and that Greek banks also have a "tiny" footprint in Britain.

"The risks arising from Greece and the global economy will test market liquidity and could potentially trigger broader adjustments in financial markets," he said.

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5:13 p.m.

French President Francois Hollande is urging an accord with Greece over its debt before a referendum scheduled Sunday instead of waiting until after the result, a stance that puts him at odds with German Chancellor Angela Merkel.

Hollande, speaking in Lyon, also said it's the responsibility of other countries that use the shared currency to keep Greece in the eurozone.

"We have to be clear. An accord is for right now, it will not be put off," he said.

He said waiting for the referendum raises a risk of turbulence and a "leap into the void."

Hollande, who has been one of the few remaining allies of Greece's left-wing led government in the EU, criticized "intransigent comments" and "vetoes or roughness," in an apparent reference to Germany's tough stance.

"It is our duty to keep Greece in the eurozone," he said. "That depends on Greece ... but it also depends on us."

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5:10 p.m.

The leader of Greece's powerful Orthodox Church has made an appeal for calm amid concern that public rallies for Sunday's referendum could trigger ugly political divisions among voters.

Archbishop Ieronymos says Wednesday that "we must not let the poison of division touch our hearts ... It would be a crime commit against future generations."

Although demonstrations over Greece's debt crisis have been peaceful of late, the deteriorating economic conditions in the nation of 11 million have created concerns that the mood at rallies could turn ugly.

The archbishop also says "our country unites all of us, our concern for the present and the future must never divide us."

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4:55 p.m.

Eurozone member Slovenia has criticized Greek government's handling of the debt crisis, saying its actions have prevented a new bailout agreement with the European Union.

Slovenian Prime Minister Miro Cerar said Wednesday "Slovenia is ready to help Greece and Greek people but cannot agree to the Greek government's maneuvers, which are preventing any constructive agreement at the EU level."

Cerar says Slovenia's exposure to Greece's debt amounted to 3.2 percent of its gross domestic product, the highest among the 19 nations that use the shared euro currency.

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4:45 p.m.

About 200 retirees have demonstrated outside Greece's Finance Ministry in central Athens before marching to the Bank of Greece to demand access to their full monthly pensions.

Greece imposed capital controls Monday to prevent a bank run from draining all remaining deposits in Greek banks. The country is holding a referendum Sunday on whether to accept creditor demands in return for rescue loans. Greek banks will remain shut through at least next Monday, and ATM withdrawals have been limited to 60 euros ($67) per day.

Elderly Greeks have been particularly hard hit, because many don't have bank cards and have been completely cut off from their funds.

About 1,000 bank branches opened across Greece for three days beginning Wednesday to allow retirees to withdraw a maximum of 120 euros ($133) for the week. Payments to some social security funds have also been delayed.

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3:55 p.m.

Pope Francis is urging prayers for Greece and its people as they weather a "keenly felt human and social crisis."

The Vatican spokesman, the Rev. Federico Lombardi, said in a statement Wednesday the situation over Greece's expired bailout program was "worrying." He said the dignity of Greeks must be paramount in any decisions that emerge from the crisis.

He added "the Holy Father wishes to convey his closeness to all the Greek people, with a special thought for the many families gravely beset by such a complex and keenly felt human and social crisis."

He said the pope was urging the faithful "to unite in prayer for the good of the beloved Greek people."

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3:05 p.m.

The head of the Council of Europe, Europe's top human rights institution, says Greece's referendum would fall short of international standards if held as planned on Sunday.

Council of Europe Secretary General Thorbjorn Jagland told The Associated Press that international standards recommend that a referendum be held with at least two weeks' notice to allow sufficient time for discussion, with a clear question put to the people and with international observers monitoring the vote.

Greece's referendum on whether to accept creditor demands in return for bailout funds was called Saturday, and there has been confusion as to whether the result of a "no" vote as the government recommends would lead the country out of the 19-nation eurozone.

The vote "has been called on such a short notice, that this in itself is a major problem," Jagland said Wednesday by phone from Lisbon, Portugal. "And also the fact that the questions that are put to the people ... are not very clear."

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3 p.m.

The European Commission will submit its assessment of Greece's demand for a new two-year loan program to the finance ministers of the 19 nations using the euro.

All the finance ministers, including Greece, are holding a teleconference meeting later Wednesday.

Commission Vice-President Valdis Dombrovskis says it's up to the member countries to decide what action to take, but warns that the Greek request is being considered in "a different economic situation" than offers last week. That suggests any decision could take time.

The Commission is also urging the European Financial Stability Facility — Greece's biggest creditor — not to call in its loans to Greece until decisions on a possible new bailout have been made.

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2:36 p.m.

Cyprus' finance minister is calling Greece's latest bid to thrash out a new bailout program with its creditors to be "very significant" and a "step in the right direction."

Harris Georgiades said he's cautiously optimistic that Greece's latest move would help the country "avoid dangers and move forward."

He said Cyprus wants Greece to stay in the eurozone so that "serious risks and painful consequences" for the Greek people are avoided.

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2:32 p.m.

Greece's biggest creditor says the country is likely to be in default for not paying its roughly 1.6 billion-euro ($1.8 billion) debt installment to the International Monetary on Tuesday.

The European Financial Stability Facility says that once the non-payment is officially confirmed by the IMF board "this would constitute an event of default for certain EFSF loans."

In a statement, the EFSF said its chief Klaus Regling would then have to propose one of three actions to the 19 nations using the euro.

He could suggest that the loan contract be cancelled and demand immediate payment of Greece's debt and interest, waive the EFSF's rights for this loan payment, or reserve the right to act at a later stage.

The government in Athens owes the EFSF 130.9 billion euros ($145.9 billion) in loan money.

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2:30 p.m.

German Chancellor Angela Merkel is making clear that she wants the International Monetary Fund involved in any new aid program for Greece.

Merkel said making Europe strong in the world and defending its values is a key consideration in deciding whether to launch negotiations on a new bailout "on the basis of solidarity and responsibility, and involving the three institutions — the European Commission, the European Central Bank and the International Monetary Fund."

Merkel also said Europe has become stronger over the past five years and that "we can wait calmly" for the Greek referendum result.

"Today the other 18 member states no longer have to fear an economic catastrophe because Greece has gotten into turbulence," she added.

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2:23 p.m.

No votes in Sunday's Greek referendum have been cast yet, but bookmakers are already expressing confidence that voters will back creditor demands for more austerity in return for bailout cash.

Many online bookmakers already have stopped taking wagers on the outcome as money has flowed in heavily in favor of Greeks voting "yes."

The government of Prime Minister Alexis Tsipras has said it will press for a "no" outcome.

The major Irish bookmaker, Paddy Power, closed betting Wednesday and paid out winning outcomes to those who risked money on a "yes" verdict.

It said more than 85 percent of its customers' money placed on the Greek referendum outcome backed approval.

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2:15 p.m.

German Chancellor Angela Merkel is insisting that there can be no negotiations on any new aid package for Greece before its referendum on Sunday.

Merkel told the German Parliament Wednesday that "the door to talks with the Greek government was always open and will always stay open." But she said that Greece unilaterally ended talks by calling Sunday's referendum on previous creditor proposals.

She said that was Greece's legitimate right but that other eurozone countries had their rights, too.

"We will wait for the referendum," she said. "There can be no negotiations on a new aid program before the referendum."

Merkel also insisted that Europe needs to stick to rules and principles in negotiations and that a compromise at any price would only be "a result for the sake of a result."

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1:35 p.m.

German Finance Minister Wolfgang Schaeuble has rejected suggestions that a new bailout agreement with Greece was possible before Sunday's referendum.

Schaeuble said Greece's creditors in the eurozone agreed there was "no sense" in trying to reach one in a situation where there are constantly conflicting reports on what Greece wants.

"Before a referendum, there is indeed no basis (for an agreement)," said Schaeuble.

He added that with Greece's bailout having expired Tuesday, "we cannot simply act as though" the program was still in place.

Eurozone finance ministers are set to discuss Greece's latest proposals in a teleconference later.

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1:20 p.m.

A Greek official has sought to douse suggestions that Greek Prime Minister Alexis Tsipras has caved in to creditor demands.

In a letter sent to creditors Tuesday proposing a new deal for Greece, Tsipras appeared to make significant concessions in a request for a new bailout deal.

The Greek official insisted that press reports he had "fully accepted the creditor proposal are not true."

In the letter, Tsipras said Greece is "prepared to accept" the creditor proposal as it was presented last Sunday by European Commission President Jean-Claude Juncker, who published it on the Commission website, subject to certain amendments.

Those include maintaining the discounted value added tax on Greek islands which creditors had demanded to be abolished, and delay some labor reforms until the fall, compared to creditor demands they be enacted immediately.

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1:00 p.m.

Germany's finance minister has urged Greece to make it clear what it wants from creditors before serious talks on a new bailout can take place.

Finance Minister Wolfgang Schaeuble complained of confusing reports coming from Greece and noted that any discussions to take place will be under "much more difficult conditions" than previously.

Greece, he said "must first create clarity as to what it wants, and then we have to talk about it under much more difficult conditions."

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11:43 a.m.

French Finance Minister Michel Sapin is hoping for an agreement with Greece before Sunday's referendum but called the situation "terrifyingly complicated."

Sapin said on French radio RTL that "the aim is to find an agreement, before the referendum if possible." Eurozone finance ministers are set to discuss Greece's latest two-year bailout request later in a teleconference.

"If Greece votes yes, negotiations will continue in difficult conditions, but we'd be able to quickly find an agreement," he said. "If Greece votes no, there is a risk of sliding towards a Greek exit from the euro."

Sapin also said the "little countries," many of which have taken made big economic changes over the past few years, have taken a tougher stance on Greece than Germany.

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11:34 a.m.

Credit ratings agency Standard & Poor's reckons a Greek exit from the euro could "easily weaken the upturn" currently taking place in the eurozone.

Though, the agency says the risks of contagion to other eurozone countries are less elevated that in 2010-11, it does warn that a so-called Grexit could "lead to increased risk aversion among investors, lenders and consumers."

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10:40 a.m.

Thousands of elderly Greeks thronged banks that were opened especially for pensioners who don't have bank cards, to allow them some access to their money.

Withdrawals are limited to 120 euros ($133) per person for the week.

However, a seeming last minute decision to serve customers on an alphabetical basis, announced by some banks overnight and others in the morning, led to confusion and frustration.

Many pensioners waited in line from before dawn but were eventually told they would have to return Thursday or Friday.

Greek banks have been closed since Monday as the government imposed strict capital controls to prevent a bank run in the wake of its decision to call a referendum on creditor demands.

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10:30 a.m.

Markets took in stride Greece's failure to pay the roughly 1.6 billion euros ($1.8 billion) it owed the IMF with stock indexes across Europe posting solid gains. The Stoxx 50 index of leading European shares was up 0.7 percent while Germany's DAX rose 0.9 percent.

There appear to be some hopes that Greece's new proposals to the eurozone may meet with some support. Eurozone finance ministers are set to weigh Greece's latest proposal for aid later, in a teleconference that's been put off until 5.30 p.m. Brussels time, according to Jeroen Dijsselbloem, the eurozone's top official.

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