In an 11th-hour attempt at making fast-approaching debt repayments and avoiding a disastrous exit from the eurozone, the Greek government has formally filed a request for support from Europe’s bailout fund. The one-page letter outlining the request, leaked to the media Wednesday, gives a broad overview of the bailout’s proposed terms and the economic reforms Greece promises to make.
Without going into specifics, the letter states Greece would immediately overhaul parts of its tax and pension systems, with changes coming down “as early as the beginning of next week.” Greece’s creditors at the European Central Bank have made tax and pension reforms paramount to extending its support program to Greece, which recently missed a scheduled 1.5 billion euro ($1.7 billion) payment to the International Monetary Fund.
According to the request, the Greek government would seek a three-year lending facility, an increase from last month’s two-year request. The Greek government owes 3.5 billion euros ($3.8 billion) to the ECB on July 20, a payment that the government currently cannot make. Numerous European officials have made the unprecedented assertion that failure to secure an agreement in the coming week will likely mean a Greek exit, or Grexit, from the eurozone.
Although this request formally opens talks with the European Stability Mechanism, the eurozone’s 500 billion euro bailout fund, Greece’s full proposal will be outlined in coming weeks.
Greece’s left-wing Syriza government has steadfastly demanded its creditors offer debt relief, a measure supported by the IMF. Despite initial proclamations its negotiators wouldn’t budge in resisting further austerity measures, however, the Greek government has offered concessions to some of its creditors’ budget and spending demands.
The letter hints at Greece’s continued insistence on debt relief: “Greece welcomes an opportunity to explore potential measures to be taken so that its official sector related debt becomes both sustainable and viable over the long term.”
Eurozone finance ministers are expected to discuss the request Wednesday via teleconference.