Greece crisis: Greeks seek three-year bailout loan, pledge to enact reforms next week
Greece promised to implement pension and tax reforms as early as next week as the first step to securing a three-year rescue loan to cover debt obligations, according to a letter requesting the funding from European partners on Wednesday.
In the letter sent to the European bailout fund released by the government, Greece also pledges to honor its financial obligations and detail by Thursday reforms proposals for evaluation by the creditors.
"We trust Member States appreciate the urgency of our Loan request at this time given the fragility of our banking system, our shortage of available liquidity, our upcoming obligations, our buildup of internal arrears, and our expressed desire to clear our outstanding arrears with the IMF and the Bank of Greece," the letter from the Greek finance minister said.
Athens also said it welcomed an "opportunity to explore potential measures" to make its debt sustainable, as part of broader discussions to be held.
Earlier, Greek Prime Minister Alexis Tsipras has issued a plea for a resolution to his country's debt crisis which will offer "light at the end of the tunnel" after more than five years of austerity.
Mr Tsipras told the European Parliament that proposals presented to the Eurogroup would involve restructuring of Greece's debts along with a package of reforms taking on wealthy vested interests in the country, who he said had so far failed to bear their share of the burden, and an "agenda for growth" to revitalise its ailing economy.
As Greek MEPs waved banners bearing the word Oxi - or "No", the slogan of the anti-austerity camp in last weekend's referendum - Mr Tsipras urged the European Union to heed the "resounding verdict" of voters who had given him a mandate to secure a "socially just and economically sustainable" resolution to the crisis.
But there had been signs of patience wearing thin among frustrated eurozone leaders, after an emergency Brussels summit last night at which Greek Finance Minister Euclid Tsakalotos failed to provide any concrete proposals.
The Eurogroup's top official, Jeroen Dijsselbloem, said he was expecting Athens to send a new request letter for assistance from the European Stability Mechanism (ESM) bailout fund, which would be considered by the institutions and the countries which use the single currency.
"All this has to be done in a matter of days," he warned. "We have very little time, as you are all aware."
European Council president Donald Tusk said: "Our inability to find agreement may lead to the bankruptcy of Greece and the insolvency of its banking system. And, for sure, it will be most painful for the Greek people. I have no doubt that this will affect all Europe also in the geopolitical sense.
"The stark reality is that we have only five days left to find the ultimate agreement. Until now, I have avoided talking about deadlines. But tonight I have to say loud and clear that the final deadline ends this week."
Read more here: Greece 'preparing debt plan detail'
EU economy commissioner Pierre Moscovici told the BBC Radio 4 Today programme that Greece must make reforms to break the deadlock.
"It's clear the 18 other member states and also the IMF, the Commission, are expecting reforms in Greece because they are just necessary for the Greek people," said Mr Moscovici.
"They know what they have to do and they know what we expect. They need to do that."
Speaking to the European Parliament in Strasbourg, Mr Tsipras insisted he was not seeking a "clash with Europe" and said a detailed set of proposals would be delivered within two or three days, telling MEPs: "I believe that together we can rise to this historical challenge."
But he said the solution must be based on "mutual respect and equality" and must not "repeat the mistakes of the past which condemned the Greek economy to an impasse of austerity, which trapped our economy in a recessionary vicious circle".
Read more here: Merkel faces party revolt over aid for Athens
Five years of reform imposed under the terms of Greece's financial bailout had transformed the country into "an austerity laboratory", with sky-rocketing poverty, soaring unemployment, increased social marginalisation, but also growing public debt, he said, adding: "This experiment, I think all of us have to accept, has not been a success."
Mr Tsipras, whose left-wing Syriza party was swept to power for the first time in January, blamed Greece's economic woes on earlier administrations which had created a "clientilist" state in which tax evasion ran riot and a small group of oligarchs controlled more than half the country's wealth. Syriza's plans would "tackle head-on the Establishment in our country and change the mindset which has taken us down", he promised.
Some £26 billion was wiped off the value of Britain's top companies yesterday as Greece engaged in its high-stakes brinkmanship.
With hopes of a deal fading, investors took fright across the continent - sending the FTSE 100 index down more than 100 points.
Germany's Dax and France's Cac 40 were also hit, each shedding around 2pc.
German Chancellor Angela Merkel has insisted the door is still open to restarting negotiations, but any new plan must be "serious and credible".
The European Central Bank (ECB) has tightened the screw on Greece's embattled banks - which had been due to reopen yesterday but will now remain shut until at least Thursday - by raising the amount of collateral they must provide as security against emergency lending.
British Chancellor for the Exchequer George Osborne, who is unveiling his first Tory-only Budget, has warned that the UK will not escape the fallout despite remaining outside the eurozone.
He will also cite the crisis as further evidence that the UK must stick to its plans for eradicating the deficit.
With limits imposed on withdrawals, British tourists have been warned to take sufficient cash to cover expected costs and emergencies and to ensure they have supplies of their usual prescription medicines in case of shortages.
Pensions continue to be paid as normal to expatriate Britons living in Greece and measures have been put in place to support British firms facing cashflow problems as a result of capital controls imposed by the Greek government.
Staffing levels have been increased at the UK embassy in Athens, and more consular staff have been deployed on the islands of Crete, Corfu, Rhodes and Zakynthos to help British nationals.
Read more here: Ireland's exposure to Greek debt is €2.6bn, says think-tank
Ukip leader Nigel Farage urged Mr Tsipras to take Greece out of the euro.
Speaking in the European Parliament following the Greek PM's address, Mr Farage told Mr Tsipras: "They will give you no more, these people. They can't afford to. If they give you more, they will have to give other eurozone members more.
"Your moment has come and, frankly, if you've got the courage, you should lead the Greek people out of the eurozone with your head held high.
"Get back your democracy, get back control of your country, give your people the leadership and the hope that they crave.
"Yes, it'll be tough for the first few months but, with a devalued currency and friends of Greece all over the world, you will recover.
Mr Farage said the Greek crisis revealed "an irreconcilable cultural difference between Greece and Germany ... a split between the north and the south of Europe", adding: "The European project is actually beginning to die."
He said: "The plan has failed. This isn't just Greece we are talking about today. The whole of the Mediterranean now finds itself in the wrong currency, and yet virtually nobody in the political arena has the courage to stand up and say that.
"I feel that the continent is now divided from north to south. There is a new Berlin Wall and it's called the euro."