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Greek PM seeks EU talks after ECB snub

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Greek Prime Minister Alexis Tsipras has requested a meeting with European Commission chief Jean-Claude Juncker, a government source said on Friday, after Athens got no help from the European Central Bank to address a cash squeeze.

[ATHENS] Greek Prime Minister Alexis Tsipras has requested a meeting with European Commission chief Jean-Claude Juncker, a government source said on Friday, after Athens got no help from the European Central Bank to address a cash squeeze.

"The prime minister called Mr Juncker to arrange a meeting next week," a government source said.

The government later said in a statement: "The meeting will discuss how Greece will utilise European funds to address the humanitarian crisis and unemployment." German daily Sueddeutsche Zeitung had earlier reported that Mr Tsipras had wanted to see Mr Juncker today, but his request was turned down.

Athens is scrambling to find cash to address a dauting debt repayment schedule this month.

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Greece this month needs to find around 6.0 billion euros (US$6.8 billion) for debt repayments.

A finance ministry source on Friday said Athens had repaid the International Monetary Fund a first debt instalment of 310 million euros.

Greece's new anti-austerity government last month reversed course and agreed to temporarily extend its EU-IMF bailout, but until Athens wins approval for its plans for a four-year economic recovery blueprint it has no access to funds remaining in the 240-billion euro (US$272-billion) rescue programme.

The government has said it will present a first batch of concrete proposals to eurozone ministers on Monday in a bid to break the deadlock.

"It is very important that the Eurogroup be successful. We are all working to this end," Bank of Greece governor Yannis Stournaras told reporters after seeing the prime minister.

He added that the government would work "non-stop" over the weekend to secure a "positive result" on Monday.

The government had pinned its hopes on the European Central Bank giving more leeway to Greek banks to buy state bonds.

But the ECB on Thursday maintained a tough line on Athens, saying it was prepared to give more room on financing once the Greek government reaches a debt deal with its eurozone partners.

The ECB recently cut off a key channel of financing for Greek banks, saying it would no longer accept Greek sovereign bonds as collateral for loans.

That means they now rely solely on emergency liquidity assistance (ELA) which is more expensive than normal central bank refinancing operations.

ELA funds are also limited by the ECB, as well as the amount of short-term treasury bills that Athens can issue.

Mr Stournaras insisted Friday that Greek banks are "sufficiently capitalised" and have "secure liquidity".

"There is no danger...there is no absolutely no problem with deposits," he said.

There have been concerns that without ample support from the ECB that Greeks could view the banks as being vulnerable, triggering a run on deposits that could provoke a crisis that leading to Greece's exit from the euro if no help was forthcoming.

AFP

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