Cutting the Gordian Knot? Greece Proposes Rescue Plan on Debt Restructuring

The Greek government proposed on Tuesday to make a two-year agreement with the European Stability Mechanism (ESM) to cover the country's financial needs and simultaneously restructure the debt, Prime Minister Alexis Tsipras' office said.

MOSCOW (Sputnik) — The European Stability Mechanism is a crisis resolution mechanism for the Eurozone countries.

"The Greek government proposed today a two-year contract with the ESM, in order to fully cover the financial needs, with simultaneous debt restructuring," Tsipras' office said.

"The Greek government is seeking a viable agreement in the Eurozone. A 'No' in response to a bad agreement in a Sunday referendum will send a similar message," the statement distributed by the Athens News Agency read.

Athens has repeatedly stated that the decision to hold a referendum is not the end but the continuation of negotiations for more favorable conditions for the Greek people, according to the statement.

Greece has been in talks with international lenders on its multi-billion dollars debt ahead of the expiry of the current bailout program at midnight on Tuesday. So far, the sides failed to reach agreement on debt crisis settlement.

On Saturday, Athens announced a July 5 referendum to ask voters to decide whether to accept a new bailout deal offered by the country's international creditors in exchange for unpopular austerity measures.