PS: Greece has, once again, made the front pages of several newspapers:

A couple more photos from tonight’s anti-austerity, pro-government protest in Athens:

The Speaker of the Greek parliament is at tonight’s rally, hours after tangling with Bank of Greece governor Stournaras over his warning that Greece could crash out of the EU without a deal.

Our correspondent Helena Smith is in Syntagma Square.

She says the turnout at tonight’s rally isn’t great, and several of the demonstrators have told her they believe Greece should ‘rupture’ away from the European Union.

A glance at the posters and banners on display tonight in Athens show there is still support for Alexis Tsipras’s government in its battle to get an ‘honourable compromise’:

As if the Greek crisis wasn’t dramatic enough, the spotlight will shift to Russia on Friday when Alexis Tsipras visits St Petersburg.

He’ll meet with president Vladimir Putin, on the sidelines of an economic summit. And there is speculation that Moscow could potentially offer Athens a credit line, as my colleague Shaun Walker reports:

“A financial deal package to Greece is definitely possible, but it’s unlikely to come as a straight bailout loan, and more likely to be packaged as part of an advance payment deal over gas transfer or something similar,” said Chris Weafer, a Moscow-based financial analyst.

The two leaders will discuss Greek participation in a major pipeline project that would bring Russian gas to Europe through Turkey and Greece, bypassing Ukraine – a long-term Russian strategic aim....

Here’s Greek finance minister Yanis Varoufakis telling reporters in Paris that “it is our moral duty to reach an agreement very, very quickly”.

As we posted earlier, he doesn’t expect a deal tomorrow -- but the eurogroup meeting could “set the scene” for further discussions.

The Daily Telegraph’s Merheen Khan is at Syntagma Square, and reports that there is a pretty decent atmosphere despite the crisis gripping Greece.

Sorry, that banner’s hung outside the Greek parliament, not actually on it (as a reader across the square kindly reports):

Demonstrators have hung a banner outside the Greek parliament, urging people to support Greece at this crucial time and help end austerity in the country.

Crowds are gathering in Syntagma Square, outside the Greek parliament, for tonight’s anti-austerity rally:

There’s talk that a senior US department of state official, Amanda Sloat, will visit the Greek capital on Thursday to push for an agreement.

And signs the demonstrations are beginning:

Over in Athens the governing Syriza party has issued a thinly veiled attack on the governor of the Bank of Greece saying he has gone beyond the boundaries of his constitutional role by warning that the country is on the brink of “uncontrollable crisis.” Helena Smith writes:

Following House president Zoe Konstantopoulou’s criticism of Yannis Stournaras, Syriza has also released a statement saying the Bank Governor had not only breached his constitutional role but actively attempted to limit the room the government had for maneuver in its negotiations with creditors.

“With his report today the governor of the Bank of Greece not only exceeded the boundaries of his institutional role, he is attempting to contribute to the creation of an asphyxiating framework in the moves and negotiating abilities of the Greek government,” said the statement. “And it is worth asking why this is happening when it is presumed that the role of the Bank of Greece is maintaining the stability of the banking system.”

Stournaras, who served as finance minister under the previous conservative-led “pro bailout” government, warned that failure to meet a deal would “mark the beginning of a painful course that would lead initially to a Greek default and ultimately to the country’s exit from the euro area and – most likely – from the European Union”.

More detail on those comments from the US. Reuters reports:

A senior U.S. State Department official on Wednesday repeated warnings from Washington that Greece had to make a “serious move” to break a deadlock with its international creditors.

Deputy Assistant Secretary for European and Eurasian Affairs Amanda Sloat met Greek Alternate Foreign Minister Euclid Tsakalotos and reaffirmed recent messages from President Barack Obama and Treasury Secretary Jack Lew, a statement from the U.S. embassy in Athens said.

It said she underscored “the urgency of Greece making a serious move to reach a pragmatic compromise with its creditors” and noted that “failure to reach an agreement would create immediate hardship for Greece and broad uncertainties for Europe and the global economy.”

The US continues to show its concern over the (lack of) progress in Greece’s standoff with its creditors:

• 17-Jun-2015 17:30:47 - SENIOR U.S. OFFICIAL TOLD GREEK GOVT IN ATHENS URGENT NEED TO REACH PRAGMATIC COMPROMISE WITH CREDITORS
• 17-Jun-2015 17:31:27 - U.S. OFFICIAL WARNED GREEK GOVT THAT FAILURE TO REACH DEAL WOULD BRING HARDSHIP TO GREECE, BROAD UNCERTAINTY FOR GLOBAL ECONOMY

(Snaps courtesy Reuters)

And because it’s always good to have a quick reminder of where things stand:

After comments from ECB board members yesterday that Greek banks were solvent - a prerequisite for the emergency liquidity assistance - it seemed likely the central bank would continue its support. But it made us wait for the news ......

Here’s the ECB liquidity news we’ve been awaiting:

More from Tsakalotos (courtesy Reuters):

[He] suggested Athens be offered debt relief in the form of having the European bailout fund - known as the European Stability Mechanism - take over Greek bonds held by the ECB - as one option that would not increase debt for Greece or its partners.

“There are lots of technical solutions on how that could be done,” he said. “If there is goodwill, I can think of 10-15 solutions right now of how that could be done. If there’s no political goodwill then for any solution I can think of a drawback.”

Asked how confident he was that a deal could be reached, Tsakalotos said: “I think that question is mostly for European partners now.” He said it was up to Europe to show it is willing to “learn from its mistakes” and whether it was willing to accept a government that is not in the mainstream.

Are the Greek prime minister’ negotiating skills perhaps paying off? The leader has been the butt of rare praise … in no other than the German Die Welt. And it has not been lost on the Greek media, reports Helena Smith.

The posturing, foot-dragging and sheer brinkmanship that the Greek government has displayed may not be the work of “hot-heads” but two very level-headed men who may well be Europe’s most successful politicians. So says, Germany’s leading newspaper Die Welt of the Greek leader Alexis Tsipras and his finance minister Yanis Varoufakis. The paper writes that the Greek duo are deliberately drawing out the process so that Tsipras can eventually arrive at the higher-level “political solution” he so publicly wants. The paper says the two men may have pulled off the feat of deconstructing the German psyche. “They are soberly observing the fear that is eroding German souls and drawing their conclusions. What we have been continuously reading in recent months, that Tsipras and Varoufakis have been pushed in a corner, is wrong. Right now, they are probably the most successful politicians in Europe.”

That is not, of course, how many in Tsipras’ own Syriza party see things (Varoufakis intriguingly has never become a member).

Earlier today I spoke to Stathis Kouvelakis, the London University professor, who accused Syriza of retreating to the point where it was now on the brink of suffering a mighty defeat.

Speaking from Paris, Kouvelakis predicted that the “Syriza project” would endure a huge existential crisis if it agreed to apply the reform proposals it had made to creditors. “Either Tsipras commits political suicide and accepts these measures, or he says the big ‘no’. What is sure is that after five months of so-called negotiations the outcome is worse than the starting-point which is absolutely absurd. The government waited five months, when its coffers were empty and its position extremely weakened, to delay payments to the IMF,” said Kouvelakis who sits on Syriza’s central committee. “It should have done that earlier, just as it should have made clear to lenders that if they don’t change their attitudes, there are alternative solutions.”

The Greek stock market has fallen sharply again today, unsurprisingly given the apparent slow march the country is making towards default:

Of course the timing of any capital controls in Greece could not be worse, with the summer pretty much here...

Just how short could Thursday’s short talks on Greece at the Eurogroup meeting be?

As the prospect of a Greek default and/or exit from the eurozone comes closer, there is more talk of what to do if a Grexit does happen.

British Chambers of Commerce director general John Longworth looked at the possible effect on the UK:

With a messy Grexit looking increasingly likely, many UK businesses may be hit by the resulting market upheaval, changes in trade flows, and payment issues. Central banks and governments must work to limit the disruption to business through all means possible.

As with every crisis, we need to be hard-headed enough to see if there is an opportunity in the agony. It is possible that Grexit may produce a silver lining for the UK as it seeks to redefine its position in Europe. In the aftermath of Grexit, the eurozone would have to hold an honest debate about further integration and its future operation to prevent something similar ever happening again. Within those discussions there would be an opportunity for the UK to secure meaningful changes and opt-outs that ensure a reformed EU aids our competitiveness.

Slovakia’s finance minister has tweeted that there is still time for a “miracle”:

Peter Kažimír, who will attend tomorrow’s eurogroup meeting of finance chiefs, also urged the Greek government to rein in its fiery language.

(Yesterday, the Greek prime minister said lenders were trying to humiliate his country)

Over in Athens reports are coming in that EU commission president Jean-Claude Juncker is poised to propose a new compromise, in a bid to end the stalemate between Greece and its lenders.

Helena Smith writes:

The new proposal is expected to be sent to Athens in the coming hours with well-placed sources not ruling out the Greek prime minister Alexis Tsipras having telephone contact with Juncker this evening.

Newsit is reporting that creditors will offer the olive branch of cuts being made in defence expenditure to help cover the fiscal gap this year - estimated at €2bn by the EU and IMF and €1.5bn by Greece.

The cuts would amount to €250m. But the quid pro quo would be the government overhauling the social security system - and completing axing early retirement schemes.

The proposals would, the Guardian believes, be part of an interim cash-for-reform agreement that would tide the country over the summer.

The Bank of Greece’s warning about the perils of not reaching a deal has caused a political flap in the Greek parliament.

Parliamentary speaker Zoe Konstantopoulou has dismissed the Bank’s hard-hitting report as “totally unacceptable”, and returned it to BoG governor Yiannis Stournaras.

Stournaras was finance minister in the previous coalition government led by the right-wing New Democracy party, which enforced many of the austerity measures which Syriza has vowed to overturn.

As such, there is no love lost with the Syriza-led government, given their views are almost diametrically opposite.

Some MPs are now demanding that Stournaras explain himself to parliament, flags up journalist Sophia Ignatidou.

An unusual sight these days, given the independence that central banks enjoy, points out Channel 4’s Paul Mason.

Back in Athens, Alexis Tsipras warned that he would give Europe the “big no” if an acceptable deal cannot be reached.

Speaking at today’s press conference with Austrian chancellor Werner Faymann, the Greek PM said:

“We have only one option and that is to find a solution that will be accepted and passed by the government and the parliament.....

If we do not have an honourable compromise, we will once again say the big no.”

Tsipras added that he’s thanked Faymann for his words of support this morning.

The German government has reiterated that it doesn’t want Greece to leave the eurozone.

But a spokesman has also warned that it will be hard to reach a deal at tomorrow’s Eurogroup meeting, as Athens has not tables any new proposals:

Reuters has snapped the details:

• GERMAN GOVERNMENT SPOKESMAN SAYS UNFORTUNATELY I HAVE LITTLE NEW TO REPORT ON GREECE
• GERMAN GOV’T SPOKESMAN REPEATS ASSERTION THAT GERMANY WANTS TO DO EVERYTHING TO KEEP GREECE IN THE EURO ZONE
• GERMAN FINANCE MINISTRY SPOKESMAN SAYS IT’S OUR GOAL TO MAKE PROGRESS ON GREECE AT THE EUROGROUP MEETING ON THURSDAY
• GERMAN FINANCE MINISTRY SPOKESMAN SAYS HOWEVER ONE SHOULDN’T EXPECT THE EURO ZONE FINANCE MINISTERS TO BE ABLE TO DECIDE ON DOCUMENTS ON THURSDAY

Back at the Athens press conference, Alexis Tsipras has said he’s not planning to ask voters for a fresh mandate - implying no early elections or a referendum.

He also vows to take responsibility if an “honourable compromise” is reached (ie, if it doesn’t live up to the pledges he made before winning January’s general election)

The Bank of Greece’s dire warning that the country could crash out of the EU unless it reaches an agreement sent a ripple though the Athens stock market.

The AGT index dropped another 5 points, or 1%, to 698 points, having been up in early trading.

That appears to be its lowest level since September 2012

Werner Faymann’s ‘solidarity visit’ to Greece hasn’t gone down terribly well in Brussels:

The chancellor of Austria has now arrived at the Greek PM’s residence, Maximos Mansion, for talks with Alexis Tsipras.

Werner Faymann has already repeated his call for Europe to support Greece, saying:

“For Europe to be stronger, it must show solidarity and support to any country which needs it.”

That follows Faymann’s warning this morning that Greece’s creditors are making some unacceptable demands on the country’s people:

EU officials are also telling reporters in Brussels that they have already made serious concessions to Greece, since agreeing a four-month bailout extension in February.

That implies they’re not willing to make further compromises to reach a deal.

My colleague Jon Henley is in Athens, and found plenty of evidence that Greeks have been stashing funds away in case their banking sector collapses:

He writes:

“Everybody’s doing it,” said Joanna Christofosaki, in front of a Eurobank cash dispenser in the leafy Athens neighbourhood of Kolonaki.

“Our friends have all done it. Nobody wants their money to be worthless tomorrow. Nobody wants to be unable to get at it.”

A researcher in the archaeology department at the Academy of Athens, Christofosaki said she knew plenty of people who had “€10,000 somewhere at home” and plenty of others who chose to keep their stash at the office. Was she among them?

“If I was, I certainly wouldn’t tell you.”

“People are very concerned,” said the owner of a small company who asked not to be named.

“I think those who could, have already transferred some money abroad. And lots of others have taken out a few thousand, enough to see them through any immediate crisis. I have.”

Sofia, who runs a boutique in one of Athens’ wealthier suburbs, said she and her husband had €15,000 in a safe in the garage, “just to be sure we’re not caught out.”

Elsewhere, an anonymous car concessionaire confessed to “getting into gold a little bit”.

“Not much. But it’s safe, isn’t it? That’s what they say.”

Here’s Jon’s full report:

Austria’s finance minister Hans Jörg Schelling may not be as supportive towards Greece as chancellor Faymann, suggests our Europe editor Ian Traynor.

Two months ago, Schelling said he was “somewhat irritated” by Greece’s failure to submit acceptable reforms. He could be positively exasperated by now.

Freelance journalist Omaira Gill reports that the Greek people are feeling increasingly worried by the crisis:

Over in Athens, demonstrators have occupied the offices of the European Commission in an anti-austerity protest.

Enikos has more details:

The demonstrators are members of the trade union affiliated to Syriza, called META.

They have raised a banner saying: “The people cannot be blackmailed – The country isn’t for sale”.

Europe should be able to handle the “contagion risk” if Greece were to default on its debts and crash out of the eurozone.

That’s according to Moritz Kraemer, managing director of sovereign ratings at S&P.

Speaking on Bloomberg TV this morning, Kraemer said that most investors don’t think that “Grexit” is a likely scenario. But, if they are wrong, Greece is relatively well insulated from the rest of the financial world:

If you really look at the contagion risks - the direct links through common creditors, it’s not really that important any more.

Europe also has “much more powerful firewalls” than in 2012 - including a new bailout facility (the ESM) and Mario Draghi’s new bond-buying vehicle (OMT).

There is really a much bigger, more powerful toolbox than last time.

That’s all true....but it’s worth noting that eurozone government bond yields (or interest rates) have been rising in recent weeks. That suggests they are being seen as riskier....

Kraemer also confirmed that Greece would not be in default if missed its €1.6bn repayment to the IMF on 30 June.

Here’s a couple more key quotes from the Austrian chancellor this morning, ahead of his meeting with Alexis Tsipras at noon local time (10am BST):

Europe’s stock markets are creeping higher this morning, as traders watch events in Greece nervously.

The FTSE 100 has gained 20 points, or 0.3%, in the first few minutes of trading, having been driven to a four-month low earlier this week.

The German and Spanish markets are also up just 0.2%, while the euro is a little higher against the US dollar at $1.127.

So, no panic. But the Greek saga is still hitting sentiment in the City.

As Mike van Dulken of Accendo Markets puts it:

The nation’s fate is perilously in the balance as failure by Greece and its Creditors to cede ground continues, and a mud-slinging blame game by all and sundry for the lack of progress gathers pace. The clock ticks ever closer to default.