Greece makes final bid for aid to stave off exit from eurozone
Published 09/07/2015 | 02:30
Greece yesterday made a final bid for aid from Europe's bail-out fund, as it faces a race against the clock to avoid economic collapse.
The Greek government asked for a three-year loan programme from the European Stability Mechanism (ESM), which is guaranteed by the 19 member states of the eurozone bloc, insisting it was finally ready to implement major economic reforms.
According to the letter sent to the ESM, Athens said it would "immediately implement a set of measures as early as the beginning of next week".
The move - Athens' last chance of staving off a banking collapse and exit from the euro --must be followed up with detailed proposals by midnight today, according to a final timetable fixed by Eurozone leaders last night. A meeting of all European leaders takes place on Sunday to prepare for a possible Grexit. Without a deal in place, the European Central Bank is poised to withdraw €89bn of emergency liquidity funding - a move that would trigger a banking collapse and an end to euro membership.
"Riots and chaos" will ensue, Christian Noyer, the governor of the French central bank and a member of the ECB governing council, warned yesterday.
Greek tourism groups warned of an "explosion of unemployment" if no deal is struck. There has been a surge in sales of fridges, televisions and top-of-the-range computers as Greeks attempt to turn their remaining euros into valuable hard assets.
A poll of leading economists placed the probability of Greece leaving the euro at 55 per cent, the first time it has become more likely than not. Alexis Tsipras, the Greek prime minister, was greeted with a mixture of adulation and fury as he told the European Parliament his country had become an "austerity laboratory". "We demand an agreement with our neighbours," he said, in a speech high in rhetoric but light on the new proposals for reform that his creditors demand.
Guy Verhofstadt, the liberal leader in the European Parliament, furiously accused Mr Tsipras of "sleepwalking towards Grexit" because he had failed to present serious plans for fresh loans. "Show you are a real leader and not a false prophet," he said.
Meanwhile, Taoiseach Enda Kenny has warned that Greek Prime Minister Alexis Tsipras must implement "necessary reforms" to get Greece back on to the "pathway to stability".
Mr Kenny stressed Greece remains an important part of the euro zone and the EU, insisting a deal can still be brokered which will lead to stability for the Greek people.
Mr Kenny said the lack of certainty about the future is having devastating consequences on the lives of "ordinary" people in Greece. "Hopefully, if people are really serious about this, then on Sunday the matter can be concluded successfully with the entire European council," he said.
He stressed a viable, long-term debt deal is required to ensure the country can "get onto the pathway of stability."
"That leads to confidence, investment and jobs," he added.
Tanaiste Joan Burton said Greece is top of the agenda for Europe. She told the Congress conference she wants to see a deal that will end to Greece's "very real humanitarian crisis".
"I want to see a deal that will put Greece on the road to economic recovery," she said.
"Above all, I want Greece to remain an active member of the eurozone, and for all members to resist complacency about the potential effects of Greece being left, or forced, to exit.
"But let's be clear: this will be a long, hard road and the Greek government will have to play its part," she warned.