07/08/2015 06:19 EDT | Updated 07/08/2016 05:59 EDT

The Latest: Finance ministry says Greek banks will stay closed until Monday

ATHENS, Greece - The latest on the Greek financial crisis (all times Athens local):


11:05 p.m.

The Greek finance ministry says the government has extended bank closures in the country up to and including Monday, maintaining the daily withdrawal limit at 60 euros ($66).

Banks were closed and restrictions imposed on June 29, after a heavy volume of withdrawals by depositors threatened lenders with collapse.

The European Central Bank has maintained its level of emergency assistance — but has demanded higher collateral — after Greece's bailout program expired on July 1 and the country failed to cover repayments due to the International Monetary Fund.

The bank closures have piled pressure on Greece's left-wing government to reach a new agreement with bailout creditors, and abandon a pledge to end austerity measures following a six-year recession.


10:45 p.m.

IMF Managing Director Christine Lagarde said Greece's national debt requires restructuring for bailout programs to work.

Speaking in Washington D.C., Lagarde said Greece needs to continue cost cutting reforms.

And she added: "The other leg is debt restructuring, which we believe is needed in the particular case of Greece for it to have debt sustainability. That analysis has not changed. It well may be that numbers may have to be revisited but our analysis has not changed."

The IMF and lead eurozone lender Germany are at odds over whether Athens should be offered debt relief — a request renewed Wednesday by Greece's government.

Athens is trying to negotiate a third bailout program — worth an expected 50 billion euros ($55 billion) — as it faces the risk of losing its euro membership.


7:35 p.m.

The European Central Bank has decided not to increase the amount of emergency credit that Greek banks can draw on.

A banking official, who spoke on condition of anonymity because the decision was not made public, said the ECB's emergency liquidity assistance was left unchanged.

The official said the bank is waiting to see how Greece's creditors respond to its financial aid request and its reform agenda, due to be published by Thursday.

The Greek banks have needed increased credit to deal with the daily drain of deposits. The ECB's failure to increase so-called ELA in line with Greek requests is one of the reasons why capital controls have been imposed in Greece, including the 60-euro a day withdrawal limit.

-- By Elena Becatoros in Athens.


6:20 p.m.

U.S. Treasury Secretary Jacob Lew says Greece came within a whisker of narrowing differences with creditors before negotiations broke off and Prime Minister Alexis Tsipras called a referendum on creditor proposals.

The gap, he said, was just a "couple of billion euros" — negligible when compared to the "hundreds of billions of dollars" potential damage the global economy faces if Greece leaves the euro.

Lew said a solution was still possible but that it wasn't entirely clear one will be found.

Lew insisted that the Obama administration has been engaged, helping both sides understand the options available but that the solution rested with Europe.

"They will have to solve it," Lew said in an appearance at the Brookings Institution in Washington.

At the moment, he said the risks to the U.S. economy were not immediate.


6:05 p.m.

French Prime Minister Manuel Valls thinks Greece's new request for aid is a "positive" move as the country battles to maintain its euro future.

Valls told the lower house of Parliament that France "refuses" to consider a Greek exit from the euro.

He said Greece's earlier request for help shows "real advances" toward dialogue in the latest crisis — even though the Greek government has yet to submit details of its proposed economic reforms in exchange for the new aid money.

Valls warned of geopolitical consequences if Greece sinks into financial catastrophe, such as trouble dealing with high flows of immigrants from outside the European Union or worsening tensions with Russia.

He said France is pushing for compromises between Greece and creditors, because that's "how Europe was built."


4:25 p.m.

Greece's main business and tourism associations have warned of an "explosion of unemployment" if the government fails to find a deal with creditors soon and reopen banks.

In a joint letter to the government Wednesday, five associations urge Prime Minister Alexis Tsipras not to risk the country's place in the euro.

Their letter says that "Unless business activity resumes soon, with a restoration of liquidity, there will be an explosion of unemployment that will be dramatic and will wipe out all the sacrifices made by the Greek people over the past five years."

More than one-in-four Greeks remain out of work, with the crisis and bailout austerity measures costing roughly a million jobs, mostly in the private sector.


3:55 p.m.

France's government spokesman says his country is trying to play mediator between Germany and Greece.

Stephane Le Foll said French President Francois Hollande's goal is "to find a sort of middle ground between the position of Germany and the position of Greece."

France, he said, is listening to those countries that accept the idea of a Greek exit from the euro but that it's important for his country "to facilitate, and above all keep a broad perspective" on the fact that the idea of European unity is also at stake.

France's Socialist government has been one of Greek Prime Minister Alexis Tsipras' few allies and is using France's role as a key, founding member of the European Union to try to gain a bit more flexibility.


3:40 p.m.

Spanish Prime Minister Mariano Rajoy is using a musical metaphor to describe a seeming change of approach by the Greek government as it tries to convince creditors to lend it money soon.

Rajoy told a press conference in Madrid that the "tune" being played by Greek has changed "and that's a good thing."

Rajoy said he's looking forward to seeing the "lyrics" on Thursday — a reference to the time when the Greek government has been asked to provide substantive reform proposals that underlies its request earlier for a three-year financial rescue from Europe's bailout fund.

"I hope things work out," he said. "Greece has lost a lot of time in recent months."


2:50 p.m.

Greece has made a request for a three-year loan from Europe's bailout fund and has pledged to "immediately implement" tax and pension related measures as of Monday.

In the letter sent to the European Stability Mechanism earlier, the government said it will "set out in detail its proposals for a comprehensive and specific reform agenda" on Thursday at the latest.

Greece's aim, the letter went on, was to regain "full and affordable market financing to meet its future funding requirements as well as sustainable economic and financial situation" by the time the loan ends at the latest.

The letter also says the country is committed to honouring its financial obligations to its creditors on time.

"We trust Member States appreciate the urgency of our loan request," it said.


2:45 p.m.

Greece's prime minister insists he has "no hidden agenda" to drive the country out of the eurozone amid criticism over his government's handling of negotiations for a new bailout deal.

Alexis Tsipras told the European Parliament that his only goal was to strike "a fairer, more sustainable agreement" with the other 18 eurozone countries.

Tsipras said he wouldn't have said that Sunday's referendum result was a mandate for a fairer deal rather than "a break with Europe" if he had really wanted Greece to ditch the euro.

Over 60 per cent of Greeks voted in the referendum against an austerity plan demanded by the country's creditors.


2:40 p.m.

Germany's Finance Ministry is stressing that Greece must deliver a detailed list of reforms in its application for aid from Europe's bailout fund.

Ministry spokesman Martin Jaeger said Wednesday that "this application must be comprehensive." He said it won't be enough simply to write a letter stating that Greece wants help from the European Stability Mechanism.

Jaeger says an "integral part" of the application must be a detailed account of what reform measures Greece plans in exchange for an aid program.

He is stressing that Athens can't simply return to proposals that were on the table before Greece's previous bailout expired June 30.

"We need a future-oriented, comprehensive reform program," he said.

Jaeger says he hasn't yet seen the initial request for aid that Greece submitted and can't assess it.


1:50 p.m.

The head of France's central bank says he fears the "collapse" of the Greek economy and "chaos" if Greece doesn't strike a deal by Sunday with European creditors.

Christian Noyer told Europe-1 radio that the European Central Bank has been supporting Greek banks for months, but that there is a limit to its support.

He said that "we are resolutely committed to maintaining Greece in the eurozone" and that's why emergency liquidity has been provided.

"But we are in an abnormal situation that can no longer last," he said.

And in unusually strong language, the French central bank chief also predicted "riots" in Greece if no deal is reached.


1:40 p.m.

A teleconference of the eurozone's 19 finance ministers about the Greek crisis will not be held later.

Michel Reijns, the spokesman for the eurozone's top official Jeroen Dijsselbloem, tweeted that Greece's request for support from Europe's bailout fund will be dealt with by officials from the eurogroup working group instead.

Greece submitted a request for a new support program from the European Stability Mechanism Wednesday morning. It is due to follow up with a detailed plan by the end of Thursday of how the government plans to reform its economy.


1:10 p.m.

Greece has submitted its request for a rescue deal from Europe's bailout fund.

Michel Reijns, the spokesman for the eurozone's top official Jeroen Dijsselbloem, says Greece submitted the request for a new support program from the European Stability Mechanism Wednesday morning.

The government's request is the first step in a process toward a new bailout for the debt-laden country.

Athens has to follow the request up with a detailed plan by the end of Thursday of how the government plans to reform its economy if it is to receive fresh bailout cash to stave off bankruptcy and a possible exit from the euro.

Greece has been effectively told it has to have a deal in place Sunday when the leaders of the 28 EU nations meet in Brussels.


12:55 p.m.

Donald Tusk, who chairs meetings of European leaders, has harked back to one of Greece's famous sons to urge a resolution of the country's crisis: The historian Plutarch.

"'To find fault is easy, to do better may be difficult,'" Tusk said in a speech to European lawmakers. "I hope doing better is not so difficult as Plutarch once thought. Let us prove him wrong."

Tusk says the European Union is in a "race against time to rebuild trust" as it frantically searches for a way out of months of impasse.

Tusk warned that "our inability to find agreement may lead to the bankruptcy of Greece and insolvency of its banking system."

In a tweet, he added that if a deal can't be brokered this week, "Everyone will lose."


12:35 p.m.

European stock markets were solid as guarded optimism over the prospects of a deal between Greece and its creditors in time to avoid a Greek exit from the euro.

At a summit of the eurozone's 19 leaders Tuesday, Greece was effectively told it must have a reform plan agreed by Sunday or face an exit from the euro. Sunday's summit will involve the leaders of all 28 European Union nations.

"The support for eurozone membership in Greece is clear and the political and economic costs of capital controls are rising," said George Saravelos, an analyst at Deutsche Bank. "But it is a close call."

That seems to be the general view in markets with the Stoxx 50 index of leading European shares and Germany's DAX both up 0.1 per cent. The euro rose 0.3 per cent to $1.1043.


12:05 p.m.

Greek Prime Minister Alexis Tsipras says his country has submitted a broad proposal to get another rescue plan and will present details in the coming days.

His government faces a Thursday deadline to present the detailed plan on how to save Greece from financial ruin, before a European Union summit Sunday.

Tsipras says his country wants a deal that will mean a definitive end to Greece's protracted financial crisis, and that last Sunday's referendum result does not mean a break with Europe.

Speaking to the European Parliament in Strasbourg on Wednesday, Tsipras says Greece's troubles date to long before he took office five months ago.

European leaders have readied a "Grexit scenario" about a possible exit from the euro.