EU makes last-ditch bid to save Greek bailout

A piggybank painted in the colours of the Greek flag stands amongst various euro coins in front of letters spelling the word 'GREECE' in this picture illustration taken in Berlin, Germany June 30, 2015.[Photo/Agencies]

ATHENS - EU authorities made a last-minute offer to salvage a bailout deal that could keep Greece in the euro as the clock ticked down on Tuesday, with Germany warning that time had run out to extend vital credit lines to Athens.

With billions of euros in locked-up bailout funds due to expire at midnight, the European Commission urged Greece to accept the proposed deal, while holding out hopes that some tweaks could still be possible.

If no agreement is reached, Greece will default on a loan to the IMF, setting it on a path out of the euro with unforeseeable consequences for the European Union's grand currency project and the global economy.

Greek officials, who insist that a referendum on the bailout package on Sunday is part of the negotiating process, said they wanted a deal though there was no firm offer or move towards accepting European Commission President Jean-Claude Juncker's proposals.

"We want a viable solution. If we get a credible proposal that leaves even a sniff of a viable solution, we'll be the first to take it," a senior finance official told reporters.

However prospects of a breakthrough were dampened by a cool response from German Chancellor Angela Merkel.

"This evening at exactly midnight central European time the programme expires. And I am not aware of any real indications of anything else," Merkel said at a news conference with Kosovo's prime minister.

"All I know is that the last offer from the Commission that I'm aware of is from Friday of last week."

EU and Greek government sources said Juncker, who spoke to Prime Minister Alexis Tsipras late on Monday, had offered to convene an emergency meeting of euro zone finance ministers on Tuesday to approve an aid payment to prevent Athens defaulting, if Tsipras sent a written acceptance of the terms.

He also dangled the prospect of a negotiation on debt rescheduling later this year if Athens said "yes".

By early afternoon on Tuesday no firm response had been received from Greece, Commission spokesman Margaritis Schinas told reporters.

"As we speak, this move has not yet been received, registered, and time is now narrowing," Schinas said.

The growing possibility that Athens could be forced out of the single currency brought into sharp focus the chaos that could be unleashed in Greece and the risks to the stability of the euro.

"What would happen if Greece came out of the euro? There would be a negative message that euro membership is reversible," said Spanish Prime Minister Mariano Rajoy, who a week ago declared that he did not fear contagion from Greece.

"People may think that if one country can leave the euro, others could do so in the future. I think that is the most serious problem that could arise."