Monday

11th Nov 2019

Last-minute Eurogroup to discuss new Greek bailout demand

  • Eurogroup president Jeroen Dijsselbloem has called an extraordinary teleconference to discuss Greece's request (Photo: consilium.europa.eu)

An extraordinary Eurogroup teleconference will be held at 7pm Tuesday to examine a last minute Greek request for a two-year new bailout and partial restructuration of its debt.

Following the request, the eurozone finance ministers will discuss whether to extend the current bailout programme, which ends tonight at midnight, until the loan is granted.

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That would avoid a likely Greek default when all financing instruments included in the current programme end.

The request was sent by Greek PM Alexis Tsipras to Jeroen Dijsselbloem, the Eurogroup president and Klaus Regling, chairman of the board of the European Stability Mechanism (ESM), the eurozone emergency fund.

"Greece requests financial stability support in the form of a two-year loan," writes Tsirpas in his letter, which was published by the Politico website.

"The loan will be used exclusively to meet the debt service payment of Greece's external and internal debt obligations," Tsipras adds.

Greece also "requests that its EFSF debt be restructured and reproofed in the spirit of the proposals to be made by the European Commission in order to ensure that Greece's debt becomes sustainable and viable over the long term," the prime minister writes.

Debt restructuring has been one of the main requests from the Greek government and has so far been rejected by its creditors.

The EU, the European Central Bank (ECB) and the International Monetary Fund (IMF) said the current programme should be concluded before debt relief could be discussed.

But the issue was already part of the talks.

In his press conference on Monday (29 June), the president of the European Commission, Jean-Claude Juncker said that Tsipras was told "that the Eurogroup was ready to discuss debt measures this autumn to ensure the long-term sustainability of Greek public finances".

And in an offer made to Tsipras on Monday night, Juncker proposed to include a pledge to address to issue of long term financing and debt sustainability.

By requesting a loan to finance its debt payments in addition to asking a debt relief, Tsipras is obliging the creditors to address the issue, but he could face a cold reception from member states who don't want to give new money to Greece.

According to German media, chancellor Angela Merkel reacted to Tsipras' letter by saying that Germany would not discuss any new Greek demand for aid before Sunday's referendum.

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