Greece eyes 3-year loan, offers economic reforms
Print Edition
GREECE yesterday made a request for aid from Europe’s bailout fund as it rushed to deliver details of its proposed economic reforms in time to secure the country’s future in the euro and avoid a descent into financial chaos.
The government has asked for a three-year loan program and insisted the rescue will be accompanied by major economic reforms. No amount was mentioned.
According to the letter sent to the European Stability Mechanism, Athens said it would “immediately implement a set of measures as early as the beginning of next week.”
They include tax and pension reforms, which are two of the issues that divided the Greek government and its creditors over the past few months of protracted discussions.
In the letter, the Greek government said it was asking for the loans “given the risk to the financial stability of Greece as a member state and of the euro area as a whole.”
Its aim, it said, was to regain “full and affordable market financing to meet its future funding requirements as well as sustainable economic and financial situation” by the time the loan ends at the latest.
Greece has been told it has to deliver details of the reforms by tonight so a deal can be agreed at a summit of the European Union’s 28 leaders on Sunday.
Without a deal, the country faces an almost inevitable collapse of the banking system, and European leaders have warned Greece this is its last chance to remain in the euro.
Markets are holding up despite the apparent ultimatum, with many investors predicting a last-minute deal. The Stoxx 50 index was up 0.3 percent.
“Guarded optimism is the theme today, as the eurozone gives Greece one final deadline,” said Chris Beauchamp, senior market analyst at IG in London.
Prime Minister Alexis Tsipras, addressing lawmakers at the European Parliament, said his country is seeking a deal that would bring a definitive end to its financial crisis.
“We need to ensure the medium-term funding of our country,” Tsipras said in Strasbourg, France.
Christian Noyer, head of France’s central bank, said he feared the “collapse” of the Greek economy and “chaos” if Greece doesn’t strike a deal.
Greek people meanwhile were yesterday struggling with an eighth day of limits, of 60 euros (US$66.33), on bank withdrawals.
Tsipras said Greece’s troubles predated his arrival in office in January and condemned the “austerity experiment” his country has endured over the past five years.
“We demand an agreement with our neighbors, but one that gives us a sign that we are on a long-lasting basis exiting from the crisis,” he said.
He vowed to continue reforms but warned about the austerity-weariness of the public.
“This has exhausted the patience and resilience of the Greek people,” he said.
The crisis has frayed the nerves of European leaders.
Highlighting the rising anger with Tsipras, European Commission President Jean-Claude Juncker had a stark warning for Greece after Tuesday’s eurozone summit.
“We have a Grexit scenario, prepared in detail,” he said.
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