Greece formally requests new bailout loan

On brink of leaving eurozone, Greece lodges formal request for new bailout, European Stability Mechanism (ESM) spokesman says

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

With time ticking for Greece, the debt-burdened country has formally requested a 3-year loan from the eurozone’s special support fund, the European Stability Mechanism (ESM). The Greek government promised to initiate pension and tax reforms from next week in return for the new bailout, AFP reports.

Eurozone technical experts in the Euro Working Group (EWG) will review Greece's request for a loan from the ESM on Wednesday but there will be no conference call among ministers, a spokesman said.

"Request for ESM support received from Greek government, will be dealt with EWG today," tweeted Michel Reijns, spokesman for Jeroen Dijsselbloem, head of Eurogroup.

On Tuesday, several EU officials said the ministers would confer on Wednesday, however there will be "no Eurogroup teleconference," Reijns added.

Greek Prime Minister Alexis Tsipras has been criticised by creditors for having had two opportunities to offer new proposals - at the Eurogroup meeting and the special summit of European head of state and government - but not contributing anything they consider to be substantial.

Tsipras has told the European Parliament that the recent public referendum over Greece’s bailout conditions on July 5 gave him a mandate to find a socially just and economically sustainable solution to end the crisis. The Greek Finance Ministry has said that concrete reform proposals will be provided on Thursday, with Sunday being the deadline for a cash-for-reform deal.  

Next Sunday, a meeting of all 28 members of the EU will be held and new proposals from Greece are expected to be discussed by the eurozone finance ministers.

Meanwhile, after last Sunday’s snap referendum the European Central Bank (ECB) said it will maintain its emergency liquidity assistance (ELA) to Greece, but will make it harder for the country to access the funds.

ECB Governing Council member Christian Noyer said on Wednesday that it’s hard to imagine to increase emergency liquidity for Greece without reaching a deal. Noyer described next Sunday’s crisis meeting for being “really the final deadline."

In addition to having negative financial impact, it’s feared that a “Grexit” from the eurozone could bring political turmoil to Europe, especially to its south and Balkans.

TRTWorld and agencies