Germany rejects Greek plea for loan extension to its $275bn debt

Germany has rejected Greece’s proposal for a loan extension, calling it “no substantial solution”, reports say. According to AFP, the office of the German finance minister issued the response, just hours after Greece formally lodged its bid for a six-month deal to replace its bailout, which is due to expire at the end of the month. The country’s new anti-austerity government is seeking a compromise to break the deadlock with European creditors, especially Germany, as it runs the risk of running out of cash and defaulting on its debts. It has ruled out the prospect of any rolling deal under the terms of its previous rescue.

We are doing everything to reach a mutually beneficial agreement. Our aim is to conclude this agreement soon.

Government spokesman Gabriel Sakellaridis

The details of the Greek request were not made public but the Reuters news agency said it had seen a document which represented a significant compromise on previous Greek demands. The letter, purportedly written by Greek finance minister Yanis Varoufakis, pledged  to honour all Greek debts and not take unilateral action that would undermine agreed fiscal targets. The government of Alexis Tsipras - elected on an anti-bailout platform - blames the conditions of the rescue for hampering the country’s recovery and leading to a deterioration of living standards. Unemployment remains at more than 25%.

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