Greece formally requests 3-year loan from ESM bailout fund

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Greece has formally requested a three-year loan from the European Stability Mechanism (ESM) bailout fund that would be used “to meet Greece’s debt obligations and to ensure stability of the financial system”.

In a speech to the European Parliament on Wednesday, prime minister Alexis Tsipras acknowledged Greece’s responsibility for its plight after EU leaders gave him five days to come up with convincing reforms.

“If a sovereign government does not have the right to choose its own solutions, then we’ll have to adopt an extreme and anti-democratic ideology,” said Tsipras. “That is to say that for countries in a bailout programme we don’t have to hold elections, we’ll have to appoint governments, appoint technocrats and those will be responsible for the decisions.”

Tsipras recognised his own government’s share of responsibility for what has gone wrong but said a failed austerity policy was mostly to blame.

“And you’re right that in Greece there are past solutions that have to be removed like for example early retirement and we first took the initiative to remove this without being told by anyone,” Tsipras said.

He responded to an accusation from Manfred Weber that he had misled Greek voters, destroyed trust in Europe and insulted other leaders.

“I want to remind you Mr. Weber that the strongest moment of solidarity was in 1953 when your country came out indebted and looted after two world wars and Europe and all European countries showed the greatest solidarity in the 1953 London Agreement,” said Tsipras. “And they decided to write off 60 percent of the German debt and agreed to a growth plan. That was the greatest moment of solidarity of recent European history.”

Tsipras said he would announce detailed reform proposals on Thursday.

Athens has promised to implement a set of tax and pension reforms “as early as the beginning of next week.” In its loan application letter to the ESM, it said more details would follow.