A letter to the ESM from Greece’s finance minister said: “We propose to immediately implement a set of measures as early as the beginning of next week including: tax reform related measures; pension related measures”.
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If Greece leaves the euro, whether it is forced out or chooses to go amicably, it could have an impact in the upcoming British referendum on European Union member depending on how the situation is perceived.
Applause rose from leftist quarters in the EU Parliament when Tsipras said aid to Greece only helped out banks, not ordinary Greeks.
A spokesman for the country’s hardline Finance Minister Wolfgang Schäuble said any fresh bailout deal would not include “classic” debt relief such as writedowns of Greece’s €320 billion borrowings.
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.
In ideal circumstances, a summit of all 28 European Union leaders would be able to approve it on Sunday. Greece then missed a big debt payment to the global Monetary Fund, becoming the first developed economy to default to the fund.
And in unusually strong language, Christian Noyer told Europe-1 radio he predicted “riots” in Greece if no deal is reached.
Without a deal in place, the European Central Bank is poised to withdraw 89 billion ($147 billion) of emergency funding – a move that would trigger a banking collapse and an end to euro membership. A few called for compromise.
Guy Verhostadt of the Liberal bloc spelled it out for him: “I am mad”, he said, red-faced and gesticulating wildly as he accused Mr Tsipras of hypocrisy by refusing to address “the privileges of the ship owners, the orthodox church, the military, the Greek islands and especially the political parties”.
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. They can not take out more than 60 euros ($67) a day from ATMs, are unable to send money overseas, including to pay supplies or bills, without special permission.
In his speech to the European Parliament, Tsipras aid Greece’s troubles date to long before he took office five months ago He described Greece as having been used as an “austerity experiment” for the last five years of bailout reforms imposed on the country that led to spiraling unemployment and poverty, and a contraction of the economy by a quarter.
“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. “An agreement which will bring about the credible and necessary reforms”, he said.
Tsipras vowed to continue reforms already undertaken.
On Tuesday, Donald Tusk, president of the European Council, released a statement following a summit on the Greek crisis.
“This has exhausted the patience and resilience of the Greek people”, he said.
He said that “the whole of the mediterranean now finds itself in the wrong currency.”
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The package of reforms raised hopes that Greece can get a rescue deal that will prevent a catastrophic exit from the euro after key creditors said they were open to discussing how to ease the country’s debt load, a long-time sticking point in their talks. In a report last week, it said European states should accept longer repayment periods and lower interest rates on their loans to Greece.
