Greek PM makes new bailout offer after IMF default

Greek Prime Minister Alexis Tsipras made a fresh reform proposal to eurozone ministers today after Greece became the first advanced economy to default on an IMF payment.

Eurozone ministers were to consider the latest gambit by the leftist premier in a conference call later today even as debt-stricken Greece's creditors poured cold water on the latest plan.

German Finance Minister Wolfgang Schaeuble effectively ruled out all negotiations, saying that no Greece deal was possible before Sunday's Greek referendum on bailout terms.

"First of all Greece must clarify its position on what it wants, and then we will have to talk about it, under conditions that are now far more difficult," Schaeuble told a Berlin press conference.

The crisis is hitting hard in Greece, where banks will be closed all week, although around a thousand branches opened today to allow the elderly to receive pension payments.

The Greek proposal was sent by Tsipras to heads of the institutions that have overseen Greece's two bailouts worth 240 billion euros since 2010, just as the European part of the EU-IMF bailout expired.

"The Hellenic Republic is prepared to accept this... agreement subject to the following amendments, additions or clarifications," the letter said, referring to the reforms-for-cash contract binding Greece with its creditors.

The government said any deal would have to allow Greece to maintain a 30 per cent VAT discount on islands and postpone a 2012 pension reform until October 2015.

But Schaeuble pointed out that the proposal "doesn't exist anymore and never existed" -- because the European offer in question was rejected by Athens last week and the aid programme formally expired last night.

Greece is seeking a new two-year bailout package worth nearly 30 billion euros to avoid pushing it further towards an exit from the eurozone a day after it failed to make a 1.5 billion euro (USD 1.7 billion) payment to the International Monetary Fund.

The missed payment underlined the failure of more than five months of wrangling between Greece's radical left government and its creditors to reshape its bailout and prevent it dropping out of the eurozone.

European leaders also want Tsipras to drop Sunday's referendum, in which the embattled far-left government in Athens is asking voters to say 'No' to reforms demanded by Greece's creditors.

Ratings agencies cut their ratings on Greece's debt as the chaos mounted, predicting it will return to recession this year.