Greece in last throw of dice

Fri, 10 Jul, 2015 - 01:00

Ann Cahill

Despite a referendum that many Greeks voted in to end austerity, the measures proposed by government are said to be the harshest yet.

With only 10 days to go before they need to repay €4.2bn to the ECB, they are said to be offering cuts and reforms amounting to €13bn, in return for a loan of under €60bn.

There were positive signals from Germany that they would be willing to extend the term of the €194bn already lent to Greece — a key request from Athens.

But all 19 eurozone countries need to agree to a new bailout, and several countries are hostile, particularly Slovakia and Estonia, that say Greece should exit the euro.

The German parliament, the Bundestag will have to vote before negotiations begin and approve the final result, something that cannot be taken for granted.

Eurozone finance ministers tomorrow and EU leaders at a summit on Sunday will need to find money to help keep the country afloat until the fresh bailout is finalised.

They will be particularly anxious to find €4.2bn to repay the ECB by July 20, otherwise the ECB will declare the Greek banks insolvent and need them to be wound up or recapitalised.

This would mean Athens would have to begin using an alternative currencyto the euro, which would effectively see them exiting the euro.

If the Greek proposals are rejected, the subject will be humanitarian aid for Greece.