Greece offered help as they look set to default payments

The rising tensions in Greece and the stock markets just don’t seem to fade away. The world is concerned about whether or not Greece will be able to pay its dues and the debt that it owes to the International Monetary fund. Whole world has set its sights on them to see if they will default their 1.6 billion Euros payment to IMF. All in all, the country owes 240 billion Euros to the troika of European Commission, IMF and The European Central Bank (ECB). There is a possibility that Greece might default the payment. In such a scenario, it will have to exit from the Euro zone and discontinue the use of Euro as their currency. Before the deadline expires for Greece on Tuesday, the European Commission President Jean-Claude Juncker has made a last-minute offer to Athens so that they can reach a bailout agreement. If accepted, Prime Minister Alexis Tsipras will have to send written acknowledgement of the same by Tuesday. The process will have to be completed in time so that an emergency meeting of the finance ministers can be held so that they agree to campaign in favor of the bailout in the planned July 5 referendums.

However, there were no solid signs that the Prime Minister was ready to drop his rejection of the bailout, which he called as a humiliation for Greece. On further inquiry, a Greek official revealed that Greece had listened to what was being proposed but Alexis Tsipras will vote ‘no’ on Saturday. Clearly, Greece is doing everything it can to stay in the Euro zone but only they are adamant about rejecting the bailout option because of its terms.

The offer to the Prime Minister was published on Sunday and proposed to set a value-added tax (VAT) on hotels at a rate of 13 per cent. Originally, this was proposed to be 23 per cent. The proposal did not mention any other additional charges so it is a bit unclear if they’ll be there or not. There has not been any official statement on the proposal yet.

The US stocks were also tipped to open higher on Tuesday and indicated that there could be some calmness in Wall Street following the Greek situation. The Greece crisis led to a 2 per cent decline in US shares on Monday but the Asian market did well and recovered some ground after closing 0.6 per cent higher. Moritz Kraemer, chief rating office at ratings agency Standard & Poor’s said,” Missing the IMF payment doesn’t change much, what does change is that the program lapses at mid-night and that means we’re back at square one. This would also be the first time in over five years that Greece has no support program from the EU.”