(MENAFN- AFP) Greek Prime Minister Alexis Tsipras vowed Wednesday to push ahead with a controversial bailout referendum despite pressure from European leaders, and urged creditors to accept a fresh reform offer by Athens.
Hours after Greece became the first advanced economy to default on the IMF, the leftist leader used a televised address to tell Greeks to vote 'No' on Sunday to creditor austerity demands.
European ministers were due later Wednesday to consider a new proposal from Athens but German Chancellor Angela Merkel has already insisted there can be no new deal before the referendum.
"A 'No' vote does not signify a rupture with Europe, but a return to the Europe of values," Tsipras told the nation, rebutting accusations from EU leaders that the plebiscite was essentially a vote on whether to stay in the union.
"Come Monday, the Greek government will be at the negotiating table after the referendum, with better terms for the Greek people," he added, standing between Greek and EU flags.
The radical Greek leader spoke hours after Merkel effectively ruled out all negotiations until after Sunday, saying that Europe could "calmly" await the outcome of the referendum.
"The world is watching us. But the future of Europe is not at stake," Merkel told Germany's Bundestag lower house of parliament.
But there were signs the crisis was opening rifts in Europe's united front, with France's leader Francois Hollande urging an "immediate agreement" after six months of stalemate with the radical-leftists in Athens.
- Uncharted waters -
A poll on Wednesday showed the 'No' camp in the lead with 46 percent, against 37 percent for 'Yes' and 17 percent undecided. However the 'No' vote share was down compared to before capital controls were introduced Sunday.
The Council of Europe rights group meanwhile said the vote fell short of European standards.
Greece entered uncharted waters with its default on a 1.5 billion euro ($1.7 billion) International Monetary Fund loan, the first by an advanced economy, and expiry of its current European bailout at 2200 GMT Tuesday.
It is now without external financial assistance for the first time in five years, while at home the banks will be closed all week, although around a thousand branches opened Wednesday to allow the elderly to receive pension payments.
Greece on Tuesday made a last-minute proposal for a third bailout worth nearly 30 billion euros to follow the two rescue programmes worth 240 billion euros that cash-strapped Athens has received since 2010.
On Wednesday Tsipras said he was ready to accept terms offered by the creditors on Sunday, despite the fact that German Finance Minister Wolfgang Schaeuble said that proposal was no longer on the table.
"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 percent VAT discount on islands and postpone a 2012 pension reform until October 2015.
- Angry pensioners -
In Greece there were angry scenes as pensioners waited to be allowed into some banks that opened for them. For everyone else the only option was to queue -- sometimes for hours -- at cash machines to withdraw a maximum of 60 euros a day.
Finance ministry employees meanwhile hung a huge banner saying "No to blackmail and austerity" out of the window of their office.
In Athens, around 20,000 people from the rival 'Yes' camp braved torrential rain late Tuesday to show their support for a bailout deal.
European and Asian stocks mostly rallied on hopes of a deal while the euro slid against the dollar, to $1.1082 from $1.1139 late in New York on Tuesday.
The European Central Bank's governing council will also meet on Wednesday to discuss the crisis in Greece.
It was the ECB's decision on Sunday to refuse to increase emergency funding for Greek banks that pushed Athens to close lenders and impose the capital controls, although it is thought likely to stick with its current stance.
Missing the IMF payment means that Athens "can only receive IMF financing once the arrears are cleared", IMF spokesman Gerry Rice said in a statement.
The IMF will rule "in the coming weeks" on Greece's request for a rare extension, a source close to the matter told AFP Wednesday -- something it has only done twice before in 1982 for Nicaragua and Guyana.
Greece faces further big repayments to the ECB on July 20.
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