Greece’s government submitted a request to its euro-area creditors to extend the availability of bailout funds for six months in a last-ditch effort to avert a cash crunch.

Jeroen Dijsselbloem, who chairs meetings of the 19 euro-area finance ministers, confirmed on Twitter that the group had received the request. Euro-area officials are scheduled to assess the Greek proposal later Thursday. If they see room for an agreement, the currency bloc’s finance ministers will discuss it on Friday.

The Greek state and its banks have effectively lost market access and stay afloat thanks to emergency lifelines extended by euro-area member states and the European Central Bank. The aid is attached to belt-tightening terms which the country’s new government, led by Alexis Tsipras, opposes. Two attempts to strike a compromise in the last 10 days ended in acrimony.

ECB policy makers on Wednesday raised the limit on Emergency Liquidity Assistance for Greek banks to 68.3 billion euros ($77.9 billion) from 65 billion euros, a euro-area central-bank official said, asking not to be identified because the matter is private. Greece has been at odds with other euro-area governments over the formula needed to extend the country’s 240 billion-euro rescue beyond its expiry at the end of February.

Greek government bonds dropped for the third time in four this week. The three-year yield rose 37 basis points, or 0.37 percentage point, to 17.73 percent as of 12:09 p.m. in Athens. That’s still down from 21.1 percent last week, the highest since the debt started trading again last year, and a record 128 percent in March 2012. The euro rose 0.2 percent to $1.1420. Greek stocks rose 1.8 percent.

U.S. Treasury Secretary Jacob J. Lew warned in a call with Greek Finance Minister Yanis Varoufakis Wednesday that failure to strike a compromise would bring immediate hardship to Europe’s most-indebted state.

 

Bloomberg News

 

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