Facts on Greece's request for 6-month EU loan

GMT 18:43 2015 Thursday ,19 February

Arab Today, arab today Facts on Greece's request for 6-month EU loan

Center of Athens
Athens - AFP

Greece on Thursday submitted a last-minute bid to the European Union for a six-month loan assistance until a new austerity-free reform deal can be worked out with its international creditors.
Here are the main points of the proposal:
- A deal 'extension' -
Greece initially insisted on a "bridge" loan, and is now calling for an "extension of the master financial assistance facility agreement" -- namely the contract governing its loan payments from the European financial support mechanism (EFSF), which essentially means its request remains the same.
- Attainable fiscal targets -
Under the previous conservative government, Greece was supposed to register a primary surplus of 3.0 percent of output this year -- that is the budget balance before interest payments on debt.
Upon coming to power last month, the radical left Syriza government insisted it would only deliver a surplus of 1.5 percent annually, as the weakened Greek economy cannot sustain further spending cuts required for more ambitious surplus goals.
In Thursday's proposal, the government pledges to attain "fiscal targets for 2015 that take into account the present economic situation" and also promises that the runaway public debt will rise no further.
- Kick out the 'troika' -
From its first day in power, the leftist Greek government made clear it would not cooperate with the fiscal auditors dispatched by the so-called 'troika', Greece's three international creditors: the EU, IMF and European Central Bank.
Instead, Greek Finance Minister Yanis Varoufakis said Athens wanted direct access to the three institutions.
Now, Greece says it will accept "supervision under the EU and ECB framework and, in the same spirit, with the International Monetary Fund."
- Debt relief -
Before the elections, then-opposition leader Alexis Tsipras had pledged to erase "over half" the country's huge debt of around 320 billion euros ($363 billion).
Tsipras' government now wants to "discuss means of enacting" a 2012 Eurogroup decision that offered Greece debt relief, such as lower interest rates, should it achieve a primary surplus.
- Save our banks -
Two weeks ago, the ECB effectively shut off Greek banks from a key channel of financing by saying it would no longer accept Greek sovereign bonds as collateral for loans in its normal refinancing operations.
Athens is now calling on the ECB to reverse this measure.
- Fiscal stability and reforms -
In line with previous announcements on its part, Greece once again pledges to "attain fiscal stability" and introduce "far-reaching reforms" to restore the living standards of millions of Greeks hit by the crisis and austerity cuts.
Athens also promises to refrain from "unilateral action that would undermine the fiscal targets, economic recovery and financial stability."
Finally, the government says it will "honour Greece's financial obligations to all its creditors."


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