Greece Promises New Reforms To Secure Bailout

No amount was mentioned.

Athens has promised to implement a set of tax and pension reforms “as early as the beginning of next week”.

However, other than alluding to plans to begin overhauling its tax and pension systems next week, Athens did not detail the economic changes it would make in exchange for the loan, saying it would provide those specifics today.

Weidmann said he welcomed the fact that central bank credit “is no longer being used to finance capital flight caused by the Greek government”.

Athens is now seeking a bailout loan “with an availability period for three years”, according to a copy of the Greek request seen by dpa.

On Sunday, the leaders of all 28 European Union countries will hold a summit where they will ultimately decide Greece’s fate in the euro.

Without a deal, the country faces an nearly inevitable collapse of the banking system, and European leaders have warned Greece this is its last chance to remain in the euro.

With hopes of a deal fading, investors took fright across the continent – sending the FTSE 100 index down more than 100 points. The Stoxx 50 index was up 0.3 per cent.

It also reiterated Greece’s “commitment to remain a member of the eurozone“. Greece has had two bailouts from its European partners and the global Monetary Fund since May, 2010, totalling 240 billion euros ($260 billion).

Shut out of debt markets and with no access to new bailout money, Greece has continued to refinance short-term maturing obligations through domestic buyers, mainly the major Greek banks. “A deal absolutely must be found on Sunday because it will be too late after that and the consequences will be serious”, he told French radio, adding that “there could be riots… and chaos in the country”.

The government’s room for manoeuvre, however, is restricted by Sunday’s referendum which showed Greek voters overwhelmingly opposed to further cuts under the austerity terms demanded by the creditors.

Speaking in the European Parliament on Wednesday, UKIP’s leader said that Greece should not be in the euro. A few called for compromise.

Liberal leader Guy Verhofstadt, for his part, accused Tsipras of engaging in the same kind of clientelism that has plagued the country for decades. The government has essentially run out of money, banks have been closed for over a week, and cash withdrawals have been capped for individuals and businesses. Tsipras also dismissed suggestions he has a “hidden plan” for a euro exit, telling the European Parliament that he only seeks “a better, fairer and more sustainable agreement” for Greece.

“We want an agreement that will give a final end to the crisis and show there is light at the end of the tunnel”, he told the packed chamber in Strasbourg, France.

Germany’s Finance Ministry said the proposed reforms must be “comprehensive”.

Tsipras vowed to continue reforms already undertaken.

“This has exhausted the patience and resilience of the Greek people”, he said.

Highlighting the rising anger with Tsipras, European Commission President Jean-Claude Juncker had a stark warning for Greece after Tuesday’s eurozone summit.

He said that “the whole of the mediterranean now finds itself in the wrong currency.” It said the country was committed to honouring its financial obligations to its creditors, and on time.

Many economists say that Greece’s debt burden, at nearly 180 per cent of annual GDP, is unsustainable for a country its size.

Germany appears to be particularly reluctant to help Greece deal with its debts if reforms aren’t forthcoming.