Greece's request for a ''loan agreement'' squares up to hardened resistance from Germany, while the ECB reviews emergency funding for Greek banks. Can deals be reached, and if not, how long can Greece stay afloat? Ciara Lee reports.
Greek prime minister Alexis Tsipras meets with the country's president Karolos Papoulias. It comes ahead of a Greek vote for a new president. But Tsipras had more pressing issues on his mind. Greece is to ask for an extension to its loan agreement with the euro zone. The new government refuses to seek an extension of its bailout program, which is due to expire at the end of the month, rejecting the demands for austerity. (SOUNDBITE) (Greek) GREEK PRIME MINISTER, ALEXIS TSIPRAS, SAYING: "We are in the middle of a tough and substantial negotiation, nothing that we did not expect has happened, we even expected this tough stance and these difficulties. We may not have expected this uprising in the country, this pride and hope that helps us very much." But the country faces strong opposition from Germany, which believes Greece should stick to all terms of the bailout. Greece is expected to request an extension of up to six months of the loan agreement. Debt markets took the news as a positive sign that the left-wing government could reach a deal . Yields on Greek and other peripheral euro zone bonds fell. Investors were also buoyed by an expectation that the ECB would approve emergency funding for Greek banks. Banks have been losing deposits at around 2 billion euros a week, and Forex.com's Kathleen Brooks says the economy would struggle to stay afloat without help. (SOUNDBITE) (English) "Greek banks are on their last legs. That is absolutely for sure, we do know that. So they are only being kept alive by the ECB. Also you've got to the look at the treasure coffers in Greece and they are also very low. People haven't been paying tax in the lead up to the election. European markets have remained largely unaffected by the flare-up in the crisis. Analysts say many investors have already factored in the possibility of a Greek exit from the bloc. (SOUNDBITE) (English) "The euro zone without Greece could become a stronger unit. It certainly would become less likely to lurch from crisis to crisis. So the calm we are seeing in the markets at the moment is really a reflection in the markets are willing to accept a Grexit." Talks between Greece and euro zone creditors broke down at the beginning of the week after Greece rejected a plan to extend its bailout. The country will likely run out of money by the end of the month if a deal is not reached.