July 8, AtoZForex.com Lagos – In a desperate bid to avert an impending breakdown of its financial system, again Greece requested a 3-year bailout program from the eurozone's rescue fund, also referred to as the European Stability Mechanism, according to a document obtained by The Wall Street Journal. The new proposal expresses a willingness from Greece to implement tax reforms and pension changes as early as next week. Greek Prime Minister Alexis Tsipras has made good on his promise made to the European parliament a few days back that his government would present a detailed list of reform proposals in a few days in a bid to unlock further bailout aid, clarifying that his country is on the "verge of bankruptcy."
This is an updated version of the two-year bailout requested in June. As regards the initial request, according to the report from the office of the prime minister, Greece asked for new bailout, the demand was proposed to cover all of the country’s financial needs for the next two years, as well as a debt restructuring plan, insisting that the government will continue to seek reasonable options in the negotiations, seeking a “viable agreement” within the euro zone, it said.
The full details of Prime Minister Alexis Tsipras' new proposal are unknown for now. Athens is in a tight corner as it is due to settle €3.5 billion ($3.85 billion, £2.50 billion) to the European Central Bank on July 20. Also, the ECB is in charge of providing emergency support for the Greek financial system, and its banks are running extremely short of physical cash. The support for the banking system may be halted if a compromise is not reached on Sunday.
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No doubt, if the ECB quits ELA to the Greek banking system, the country will be thrown in turmoil. Tspiras has clarified to the European Parliament that his government was willing to make reforms but "never-ending austerity" could not be the answer to the country's problems.
A lot of doubts still exist. As stated by Reuters, a eurozone official opined that there may be an even bigger gap between Greece and its creditors now than there was two weeks ago. The source said "the numbers have to add up, and the numbers have become vastly more unfavourable since the banks were shut and the economy seized up in the last 10 days."
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