Tuesday, June 30, 2015

At the last minute, Greece requests a third bailout

The Greek PM Alexis Tsipras has made a dramatic bid for a financial lifeline.


Greece has requested a third bailout just before a key repayment deadline on its existing debt. Just before its deadline to repay €1.6bn to the International Monetary Fund, the Greek prime minister Alexis Tsipras reportedly made the request to the eurozone’s €500bn rescue fund, the European Stability Mechanism (ESM).

In a statement from Tsipras’ office, the PM said his government was seeking “a viable solution, under the end, aimed at staying in the euro”. This would not be an extension of the country’s current bailout, which expires at midnight, but a new programme, and would likely include some measure of debt restructuring.

Greek public debt currently stands at €323bn, and fears that it will default and have to exit the eurozone persist. Banks are closed in the country at the moment, with cash withdrawals capped at €60 a day. A referendum is due to take place on Sunday, where the Greek people will vote on whether to accept the proposals from their country’s creditors.

The European Commission has stated that if funds were to be released via the ESM, Tsipras and his government would have to back a “yes” vote in the referendum. The PM has previously hinted that he would resign if the result is a “yes”.

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