Greece Confirms Loan Extension Request

Greece will ask the eurozone for a six-month extension of its European loan on Wednesday, a Greek government official has confirmed.

But the loan would not be a renewal of the current bailout agreement, which includes strict austerity measures.

On Monday night, Greece rejected a plan to extend its €240bn (£178bn) bailout, describing it as "absurd".

Greece is likely to run out of money if a deal is not reached before the end of February.

"We should extend the credit programme by a few months to have enough stability so that we can negotiate a new agreement between Greece and Europe," Greek Finance Minister Yanis Varoufakis told Germany's ZDF.

Government spokesman Gabriel Sakellaridis confirmed that meant Mr Varoufakis would be asking for a six-month extension to Greece's current loan.

Mr Sakellaridis told Greece's Antenna TV: "Let's wait today for the request for an extension of the loan contract to be submitted by Finance Minister Varoufakis.

"All along deliberations are going on to find common ground, we want to believe that we are on a good path. We are coming to the table to find a solution."

But he added the Greek government would not back down on issues that it considered non-negotiable.

German Finance Minister Wolfgang Schaeuble dismissed the Greek proposal, telling broadcaster ZDF on Tuesday evening: "It's not about extending a credit programme but about whether this bailout programme will be fulfilled, yes or no."

Mr Schaeuble added: "I don't have any new information, but there is no loan agreement, it's an assistance programme. And in this seemingly unimportant detail lies the key: Greece would like to receive credit, but not fulfil the conditions to allow Greece to recover economically."

Friday deadline

The Greek stock exchange rose 3% on Wednesday in morning trading in Athens as news of the loan extension application emerged.

Meanwhile, the European Central Bank (ECB) meets later on Wednesday to decide whether to continue providing emergency finance to Greece's struggling banks. 

Germany is said to be pressuring the ECB not to allow any extra emergency funding, as part of efforts to convince Athens to agree to extend its international bailout. 

The eurozone has given Greece until Friday to decide if it wants to continue with the current bailout deal.

Greece wants to replace the bailout with a new loan that it says would give it time to find a permanent solution to the debt crisis.

On Tuesday, Greek Prime Minister Alexis Tsipras called for a vote in the Greek parliament on whether to scrap the austerity programme on Friday, the same day as the eurozone deadline.

Bank deposits

"We will not succumb to psychological blackmail," Mr Tsipras told parliament.

"We are not in a hurry and we will not compromise."

US investment bank JP Morgan claimed over the weekend that €2bn worth of deposits was flowing out of Greek banks each week and estimated that if that were to remain the case, they would run out of cash to use as collateral against new loans within 14 weeks.

JP Morgan's estimate is based on a calculation that a maximum of €108bn of deposits is left in Greek banks.

The most up-to-date figures from the Greek central bank show deposits dropped 2.4% month-on-month in December to €160.3bn from €164.3bn, marking the third monthly fall in a row.

Dutch Finance Minister Jeroen Dijsselbloem, who is also chairing the Eurogroup meetings of eurozone finance ministers, warned on Monday night there were just days left for talks.

Mr Dijsselbloem said it was now "up to Greece" to decide if it wanted more funding or not.