ATHENS / BRUSSELS (Reuters) – Greece Thursday formally requested an extension of six months of its loan agreement with the euro area, offering major concessions on the run to avoid staying cashless in weeks and overcome the resistance of his skeptical partners led by Germany.
With its bailout program of the European Union (EU) and the International Monetary Fund (IMF) to expire in just over a week, the leftist government of Prime Minister Alexis Tsipras urgent need to ensure vital to keep afloat his country beyond the end of March financing.
The finance ministers of the euro area will meet this Friday afternoon in Brussels to study the request, the Eurogroup chairman Jeroen Dijsselbloem said in a Twitter message.
That raised hopes of a deal to avoid bankruptcy and possible Greek exit from the bloc of 19 nations that share the currency.
A government official told Reuters that Athens had requested an extension to its “Framework Agreement for Financial Aid” with the euro area, but insisted that the government was proposing different conditions to the obligations of the current rescue.
Greece had pledged to maintain fiscal balance during the interim period, make immediate reforms to combat tax evasion and corruption, and take steps to deal with what Athens called its “humanitarian crisis” and start with economic growth, he said.
The document seen by Reuters, Greece promised to meet their financial obligations to all creditors, recognize the existence of the program of the EU and the IMF and the binding legal framework and refrain from unilateral actions undermine fiscal targets.
Crucially accepted that the extension will be supervised by the European Commission, the European Central Bank (ECB) and the IMF stepped back to Tsipras, who had promised to end cooperation with inspectors called “troika” accusing them of inflicting a deep economic and social damage to Greece.
The interim period of six months will be used to negotiate a long-term recovery and growth by adding more debt relief measures promised by the Eurogroup in 2012.
The partners of the euro area have so far said that Athens must comply with the terms of the current agreement, which requires that a primary budget surplus of 3% this year, before debt service payments.
Officials eurozone officials are scheduled to speak by teleconference on Thursday to discuss the Greek request.
The words chosen could help meet at least some of the concerns that have kept the agreement in the last two weeks in suspense, allowing Athens to avoid saying is prolonging the current program, which is opposed, while creditors can avoid accepting a “loan agreement” without conditions.
continue without being cleared vital details on budget objectives, labor market reforms, privatization and other measures to be implemented under the current program.
The government spokesman dismissed Gabriel Sakellaridis information of a German newspaper that said Athens was under pressure to impose capital controls Greeks take their money from local banks, telling Reuters that such a scenario “had no basis in reality.”
An ECB spokesman also denied information Frankfurter Allgemeine Zeitung, saying there were talks about capital controls in a Wednesday meeting of the Governing Council of the central bank, which slightly raised the limit of funds Emergency Greek banks.
The Greek stocks rose on Thursday and benchmark in Athens added 2%, while shares of banks soared 9%.
Germany wants Greece to assume commitment
The German government expects Athens assume a strong commitment to its previous resolutions on reforms, told Reuters officer the euro area, after the Ministry of Finance in Berlin rejected the proposed new Athens to extend its lending program.
In a statement previously issued Thursday, the German Finance Ministry said the new Charter of Athens was “in the direction of an interim financing without complying with the demands of the program.”
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