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Greece in panic mode

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Thousands of Greeks participate in a rally called by governing Syriza party to protest against austerity measures and urge voters to say "No" in the July 5 referendum on bailout terms in Athens, Greece, on June 29, 2015. Breakdown in negotiations between Athens and its international creditors plunged the country deep into crisis. Greek government announced capital controls until July 6, while banks and Athens Stock Exchange remain shut.

The Greek government was preparing a last minute proposal for a debt repayment deal with international creditors to avert a countdown to default which may start on Tuesday evening, media reported.

Thousands of Greeks participate in a rally called by governing Syriza party to protest against austerity measures and urge voters to say "No" in the July 5 referendum on bailout terms in Athens, Greece, on June 29, 2015. Breakdown in negotiations between Athens and its international creditors plunged the country deep into crisis. Greek government announced capital controls until July 6, while banks and Athens Stock Exchange remain shut.
Thousands of Greeks participate in a rally called by governing Syriza party to protest against austerity measures and urge voters to say “No” in the July 5 referendum on bailout terms in Athens, Greece, on June 29, 2015. Breakdown in negotiations between Athens and its international creditors plunged the country deep into crisis. Greek government announced capital controls until July 6, while banks and Athens Stock Exchange remain shut.

Government sources said solutions were still being sought as the country was heading to a referendum on July 5 over the proposal tabled by lenders last week, Greek national news agency AMNA reported.

Athens is said to have received a message from European Commission President Jean-Claude Juncker to accept the creditors’ draft.

The Leftist government is believed to have rejected once again the lenders’ draft as a basis for further discussion, but was preparing a new agreement proposal to submit to the other side before calling for a Eurogroup meeting as early as Tuesday evening, television channel Mega reported, citing sources.

According to other media reports, Prime Minister Alexis Tsipras was under pressure by a group of his close aides, ruling party radical left SYRIZA lawmakers and ministers, including Deputy Prime Minister Yannis Dragassakis, into seizing the opportunity for last minute negotiations.

According to the reports, the government’s General Secretary Spyros Sagias has threatened to reign, while the country’s economy minister has expressed strong doubts over the referendum idea that triggered a series of developments over the past weekend after Tsipras’s announcement on Saturday.

With banks closed and capital controls imposed since Monday, the clock was ticking against Greece and the eurozone, Xinhua news agency reported.

By the evening, Greece needed to repay about 1.5 billion euros ($1.67 billion) in loan installments to the International Monetary Fund.

Failure to meet its obligations for a second time in a month could set in motion the procedures for default in coming weeks.

Scenarios that Greece was already on the way to the return to its own currency drachma circulated in Athens. Haris Theocharis, a former general secretary at the ministry of finance and current member of parliament with the centrist River (Potami) party, claimed that the government was making preparations for the transition.

The prime minister’s office dismissed the allegation as an “irresponsible science fiction scenario”.