European Commission has offered to provide Greece a €7 billion bridging loan for the next three months if the Greek Parliament adopts the reforms agreed with the international creditors on Monday.
EU Comm seeking €7bn in bridge fin for #Greece from
European Fin Stabilization Mechanism that requires approval
from 28 EU nations. (BBG)
— Holger Zschaepitz (@Schuldensuehner)
July 15, 2015
On Wednesday the Greek parliament is going to vote on the debt
deal agreed by the creditors and Prime Minister Alexis Tsipras.
This vote could split the ruling Syriza party, as there is no
unanimity within it. This could also put an end to Syriza’s
anti-austerity coalition with right-wing ANEL, resulting in new
The European Commission also proposed using the European
Financial Stability Mechanism (EFSM) to provide a quick bridging
loan for Greece, says Financial Times.
On July 20 Greece will have to pay €3.5 billion to the European
Central Bank. If Athens is not able to pay this debt, the ECB
will be forced to deny Greek banks access to emergency liquidity
assistance (ELA) that enables them to stay afloat.
The money from the EFSM will help Greece to settle the arrears.
Greece has received €89 billion in ELA, and the ECB is reluctant
to increase the amount.
International creditors said they were ready to discuss
restructuring Greek debt after the first evaluation of the reform
program implemented by Athens, said Finance Minister Euclid
Tsakalotos on Wednesday, speaking ahead of the vote in
According to him, “Alexis Tsipras’ government has achieved
greater commitments from the partners in the restructuring of
Greek debt than the previous governments.”
Tsakalotos acknowledged the agreement contains measures that
would contribute to a recession in the country but added they
could be turned into economic growth.
In a report released Tuesday night the IMF said Greek state debt
is poised to jump to 200 percent of GDP or national income in the
next two years, calling it “highly unsustainable”.
The troika of
international creditors – the IMF, the ECB and the European
Commission – agreed to give Greece a third bailout package on
Monday. The financial aid from the creditors could be as much as
€86 billion in the next three years. The agreement came after PM
Tsipras made serious concessions on taxes and pensions.
Speaking on national TV on Tuesday, Tsipras said he signed the
deal, “with a knife at his neck”. However, he confirmed
his intentions to finalize the agreement.