Greece pledges new reforms to secure bailout

0
Have your say

Greece has 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 programme 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”.

Those include tax and pension reforms, details of which will be presented today at the latest. Those are two of the issues that have divided the Greek government and 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 went on, 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.

Prime minister Alexis Tsipras, addressing politicians at the European Parliament, said his country is seeking a deal that would bring a definitive end to his country’s financial crisis. Greece has had two bailouts from its European partners and the International Monetary Fund since May 2010, totalling e240bn (£172bn).

“We need to ensure the medium-term funding of our country with a development and growth programme,” Mr Tsipras told politicians in Strasbourg.

The head of France’s central bank said he feared the “collapse” of the Greek economy and “chaos” if Greece does not strike a deal by Sunday.

And in unusually strong language, Christian Noyer told Europe-1 radio he predicted “riots” in Greece if no deal is reached. He also indicated the European Central Bank would effectively pull the plug on its emergency liquidity measures for Greek banks if no deal is struck.

Mr Tsipras insisted he has “no hidden agenda” to drive Greece out of the euro and that last Sunday’s referendum result, in which voters soundly rejected a previous creditors’ reform proposal, does not mean a break with Europe.

Applause rose from left-wing quarters in the EU Parliament when Mr Tsipras said aid to Greece only helped out banks, not ordinary Greeks. A few called for compromise.

The head of a conservative group in the Parliament, Belgium’s Guy Verhofstadt, said he was “furious” at Mr Tsipras’s failure to spell out specifics of his reform plans.

In Greece, meanwhile, people were struggling with an eighth day of limits on money withdrawals and shuttered banks. They cannot take out more than e60 (£43) a day from ATMs.

Mr Tsipras said Greece’s troubles pre-dated his arrival in office in January and condemned the “austerity experiment” his country has endured over the past five years that he blames for spiralling unemployment and poverty.