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Greece will accept the troika's bailout terms... but says it hasn't capitulated

Germany is still demanding the country go through with its planned referendum.

Updated 12.25

GREECE WILL AGREE to an amended version of the troika’s terms it planned to put to a referendum in return for a third bailout to keep the country afloat.

Prime Minister Alexis Tsipras made the fresh approach late yesterday as the country slid into arrears on the IMF share of its debts.

In a letter to the troika’s heads, he said Greece was prepared to accept the creditors’ terms on changes to its tax and pension systems, as well as other measures, subject to a few tweaks.

It wants any deal to allow it to keep a 30% VAT discount for its islands and some pension reforms postponed.

But in a statement on the Tsipras letter, the Syriza-led government denied capitulating to the lenders, which the anti-austerity party’s leaders had claimed they wouldn’t placate before the January Greek elections.

Greek debt crisis Greek Prime Minister Alexis Tsipras and European Commission President Jean-Claude Juncker Source: Stefan Rousseau/PA Wire

“Reports that say the Greek government has fully accepted the institutions’ proposal do not stand,” it said.

Several measures that the institutions are suggesting will not be enforced immediately but in stages so that the government can find equivalent measures to replace them.”

Greece Bailout Source: AP Photo/Giannis Papanikos

It’s not clear if the call for a third bailout will be cleared by European leaders who have to sign off on the agreement, which would release another €29 billion to the cash-strapped country.

German Finance Minister Wolfgang Schaeuble said no deal would be possible until after Greece’s scheduled Sunday referendum on accepting the troika’s bailout terms.

First of all Greece must clarify its position on what it wants, and then we will have to talk about it, under conditions that are now far more difficult,” he told reporters in Berlin.

Falling behind

Earlier, Greece officially slipped into arrears with the IMF, becoming the first developed nation to do so.

The country missed a 1am deadline to make a €1.5 billion payment to the fund, as the country sought a third bailout since 2010.

The missed payment underscored the failure of more than five months of wrangling between Greece’s left-wing Syriza government and its creditors to reshape the country’s bailout and prevent it dropping out of the eurozone.

However, talks are set to resume today, as the Greeks seek a new bailout. It says the funding would “fully cover its financing needs and the simultaneous restructuring of debt,” for two years.

Greek officials say that they will postpone a referendum planned for this Sunday on the reform package demanded by its creditors if there is an agreement in Brussels today.

Greece has entered uncharted waters without international aid for the first time in five years, sparking fears of a chaotic eurozone exit which could have untold repercussions for global markets and the EU.

On the streets of Athens, some 20,000 people turned out to show their support for a bailout deal after banks were closed this week amid the spiralling debt crisis, forcing people to queue for hours for cash.

Greece Bailout Source: AP Photo/Petros Giannakouris

Crowdfunding

If the Greeks are hoping for a 13th-hour intervention, they may look beyond the internet.

A crowdfunding attempt by a British shoe shop worker has raised an impressive, but still miles off, €568,000 since launching on Sunday.

Thom Feeney had offered a Greek island to anyone who came up with the €1.6 billion in one go, but was told by website IndieGoGo that it wasn’t his to give away.

With reporting from Paul Hosford and AFP

First published 7.43am

Read: Here is the letter Enda Kenny sent to Alexis Tsipras last night

Read: It’s official – Greece has missed a payment on its IMF loan

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About the author:

Peter Bodkin  / Editor, Fora

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