Tsipras Under Pressure to Cede After Greece Misses IMF Payment

European leaders are waiting for signs that Greek Prime Minister Alexis Tsipras is ready to compromise as his country buckles under capital controls and fails to make its International Monetary Fund payment.

With Greek society feeling the pain of rationed bank withdrawals and pensions, the government is looking for a way out of economic ruin after a bailout expired and the country joined delinquent Sudan and Zimbabwe in being in arrears to the global lender of last resort.

An 11th-hour request for a new two-year rescue package to tide over a ravaged economy was sternly dismissed by German Chancellor Angela Merkel. With Greece’s stay in the euro club at stake, finance ministers in the 19-nation bloc are scrambling for a solution to pull Greece away from the precipice after more than five years of crisis fighting and two bailouts.

“People are just completely fed up,” said Andrea Montanino, a former IMF executive board member who now heads the global economics program at the Atlantic Council in Washington.

While Tsipras has framed the July 5 referendum on budget cuts to be a vote against austerity, economists and policy makers view it as a decision on remaining in the euro. The outcome could determine whether the European Central Bank pulls a financial lifeline keeping the economy on life support.

Merkel said there was “absolutely nothing” to talk about before Sunday.

Still Talking?

Nevertheless, there are tentative signs of a thaw as euro-area finance ministers decide to take up Greece’s new aid bid for the second time at 11:30 a.m. Brussels time Wednesday. At first glance, a plan devoid of any economic-reform measures appeared to be a non-starter, according to three officials with knowledge of the first call on the proposal that took place Tuesday.

“The request from Greece appears designed to keep the region somewhat off-balance, and to create the impression that Tsipras is searching for an imaginative solution,” said Malcolm Barr, an economist at JPMorgan Chase Bank in London. “Any deal struck at this stage is going to be on the Eurogroup’s terms.”