Greece Caves, Formally Requests ESM Bailout: Full Headline And Next Steps Summary

Tyler Durden's picture

As we reported yesterday, following the latest European leaders summit, Greece was given until the end of the week to come up with a proposal for sweeping reforms in return for loans that will keep the country from crashing out of Europe's currency bloc and into economic ruin.

"The stark reality is that we have only five days left ... Until now I have avoided talking about deadlines, but tonight I have to say loud and clear that the final deadline ends this week," European Council President Donald Tusk told a news conference.

It did that moments ago when Greece officially submitted a request for a three-year loan facility from the European Stability Mechanism also promising to implement tax reform, and pension measures at the beginning of next week, which had been the biggest sticking point in negotiations for the past 5 months. And to think Syriza's main election promise was no more bailouts and the Greek people resoundly said not to just this over the weekend.

As Bloomberg reports, the loan will be used to meet Greece’s debt obligations, and to ensure financial system stability. Greece proposed immediate implementation of measures, including tax, pension reforms as early as next week. Govt to detail its  proposals for specific reform agenda on July 9 at latest or tomorrow.

More details from the WSJ:

Greece formally requested a three-year bailout from the eurozone’s rescue fund Wednesday and pledged to start implementing some of the overhauls demanded by creditors by early next week, according to a copy of the request seen by The Wall Street Journal.

 

Crucially for Greece’s creditors, the letter says the government would start implementing some measures, including on taxation and pensions, by the beginning of next week, though it doesn’t go into details.

 

The letter is a first step toward fulfilling a demand by international creditors, who have given Athens until Sunday to come up with tougher measures they would impose in return for desperately needed financing that could keep the country from bankruptcy and even worse economic turmoil. 

 

The full list of overhauls and budget cuts is what will determine whether the application for a new rescue program will be approved by the rest of the eurozone. The currency union’s leaders said Tuesday they would assess whether it makes sense to start formal negotiations on a bailout program at an emergency summit on Sunday.

In other words, and as expected, Greece has essentially capitulated to Troika demands which will come with far harsher terms and even more austerity, just to keep the myth that Greece is an "equal member" in the Eurozone, yet virtually all the proceeds will go back to repaying the ECB, the IMF and other official taxpayer-backed European creditors as well as the occasional private holdout creditor.

This is all happening as Tsipras is currently talking in the Euro parliament, where he is trying to strike a far more cooperative tone now the only Greek hope is that it is not too late for Europe to accept any offer Greece will propose, oblivious of the referendum.

Earlier he submited the following statement after the Eurozone summit.

Here are some of his speech highlights via Reuters:

Thank you for the invitation-& honor-to address the elected representatives of peoples of Europe.

 

The Greek people's brave choice in conditions of unprecedented pressure, does not mean a break w/Europe.

 

My country was used to experiment with austerity. The experiment, we must admit, failed.

 

The majority of Greek people feel that there is no other choice but to stop treading this road to nowhere.

 

Our proposal to the institutions includes: credible reforms based on a fair sharing of burdens.

 

It includes the adequate coverage of the country's financial needs.

 

It includes a strong investment program, primarily for combating unemployment and encouraging entrepreneurship.

 

It includes a commitment to begin a sincere discussion regarding a solution to problem of sustainability of Greece's public debt.

 

Our proposals for financing our obligations & restructuring our debt will not burden European taxpayers.

 

I'm not one of those politicians who claim that foreigners are to blame for all of Greece's woes.

 

Previous governments created clientelistic state, furthered corruption & strengthened ties to economic elite.

 

Our proposals focus on reforms that aim to change #Greece, reforms that the Memoranda purposely did not include.

 

Now, must reach a viable & honest compromise, one that will avoid a historical break & goes against EU tradition.

 

And I am sure that we're all aware of-& we'll all take into account-our historic responsibility. Thank you.

It is unclear if Tsipras has converted the Syriza hard cores to his camp just days aftter the critical Greek "Oxi" referendum passed on a landslide, but at least one MEP was convinced:

All of us, urgently, by Sunday, have to do what needs to be done, whatever it takes, as Mr. Draghi says, so we see the word Grexit wiped out of EU vocabulary for ever.

     - Dimitrios Papadimoulis, MEP FROM TSIPRAS'S SYRIZA PARTY

But others were not easily fooled:

So if this piece de theatre continues I think we will be more and more confused about who and what we are trying to save. Are we trying to save the currency union, Greek society, the credibility of the government, the creditors, the reputation of Angela Merkel, or the infallibility of ever closer-union?

 

We certainly cannot save all of these. There will be some casualties.

     - Ryszard Legutko, MEP FROM CONSERVATIVE GROUP ECR

In any event, the latest Greek crisis, if only for the time being, is likely about to close this weekend. Will the can be kicked for 3 years or will the Greek people confirm they have had enough and rebel from under Tsipras, we will hopefully find out shorly.

In the meantime, here is the recap of all the key Greek headlines and events in the past several hours from Reuters and Bloomberg...

  • 1147 - German finance ministry spokesman rejects measures that reduce the current value of Greek debt such as debt reprofiling
  • 1139 - European Banking Authority says remains vigilant but markets coping well so far with Greek uncertainty
  • 1130 - Greece proposes to implement as early as next week tax and pension reform measures, letter shows
  • 1125 - Greece requested a three-year loan from the European Stability Mechanism bailout fund but didn't specify volume of financing sought, a euro zone source tells Reuters
  • 1125 - European Council President Donald Tusk says without unity on Greece we will in four days wake up in a different Europe
  • 1122 - If Greece and its creditors don't agree by Sunday to start talks on third bailout, it will be necessary to think about other options, a spokesman for the German finance ministry says
  • 1117 - Greek Prime Minister Alexis Tsipras tells EU Parliament he will come up with very specific proposals on Thursday

     

  • 1015 - Technical experts will review Greece's request for an ESM loan on Wednesday but there will be no conference call among euro zone ministers, a spokesman says
  • 0956 - Russia is not in a position to help solve the Greek debt crisis, and the EU should resolve it on its on, the chief executive of Russia's second largest bank VTB says
  • 0947 - Greece lodges formal request for bailout loan with the euro zone's special support fund, a spokesman for the European Stability Mechanism says
  • 0920 - European Central Bank Governing Council member Ewald Nowotny says hard to imagine that ECB council could increase emergency liquidity for Greece
  • 0904 - Bank of Italy and ECB member Ignazio Visco says ECB will will do what it can to contain financial and economic consequences of Greek crisis.
  • 0903 - Greece successfully rolls over T-bills to refinance a maturing six-month issue
  • 0820 - Greek Prime Minister Alexis Tsipras tells European Parliament says will present details proposal to EU in next 2-3 days.
  • 0812 - Greek Prime Minister Alexis Tsipras tells European Parliament the referendum gave him a mandate to find a socially just and economically sustainable solution to end the crisis.
  • 0747 - EU Economics Commissioner Pierre Moscovici tells BBC radio an agreement between Greece and its euro zone partners is still possible.

    JULY 7

  • 2347 - Euro zone members give Greece until the end of the week to come up with a proposal for sweeping reforms in return for loans
  • 2135 - Merkel says she hopes to have sufficient reform proposals from Greece this week to be able to ask the German parliament to approve negotiations on a new long-term aid programme for Athens. If the reform list was adequate and Greece took some prior actions to enact first measures, she says she is sure that short-term finance can be provided to help Athens over its immediate funding needs.
  • 2030 - Austria's finance minister says Greece's request for financial aid from the European Stability Mechanism (ESM) is so far very vague.
  • 2020 - Summit over; Italian Prime Minister Matteo Renzi says a final meeting on Greece, involving all 28 EU leaders, will take place on Sunday.
  • 1932 - Greek banks could start to run out of cash over the next two days if creditors do not agree to a new aid deal, two sources familiar with the country's financial system say.

.... and here are the key catalysts in the coming days.

  • July 8: Greece scheduled to submit request for a bailout agreement to the European Stability Mechanism
  • Euro area finance ministers may hold a conference call to assess Greece’s request for a new program * European Central Bank Governing Council will review liquidity situation of Greek lenders
  • Greek bank holiday, capital controls decree expires; government set to renew it
  • July 9: Greece must submit its reform agenda, which will be assessed by the European Commission, the European Central Bank and the International Monetary Fund. Results will be given to the Eurogroup, which will hold another call to discuss the new proposals
  • July 10: Greece needs to refinance EU2b in t-bills
  • July 11: Euro-area finance ministers will meet in Brussels
  • July 12: Euro-area and EU leaders will hold meetings to discuss the results of Greece’s expected comprehensive reform agenda

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Debugas's picture

by now any insider knows for sure if greece is serious about leaving the euro or just bluffing

because if greeks were serious they would have already had tons of drachmas printed and stored someplace

VinceFostersGhost's picture

 

 

I'll need to double check....but I think I won the pool.

J S Bach's picture

Greeks... still caving and slaving.

101 years and counting's picture

yawn.....there is no bailout.  all for show.  the people of greece have spoken.  i cant believe "they" have been able to keep up this charade.

EscapeKey's picture

the people of greece doesn't matter

seriously, what the fuck was the vote all about?

Cui Bono's picture

This is all bullshit.... The plane crash in SC means

"28 days... 6 hours... 42 minutes... 12 seconds. That... is when the world... will end."

I thought everyone knew this......

MillionDollarBonus_'s picture

What did I tell you! Well done Greece! This is the right and sensible decision. You will not regret this. Those who followed my advise and loaded up on Greek bonds prior to this temporary scare will be richly rewarded. It amazes me that the ZH community passes up spectacular opportunities like this over and over again. Do you people like losing money, or are you just financially incompetent?

MillionDollarBonus_'s picture

Don't get me wrong - I think Syriza's socialist policies are exactly what Greece needs to rebuild its economy.The Greek people have learnt exactly the right lesson from this disaster - excessive capitalism and an unregulated free market creates wealth inequality and ultimately economic and social disasters. However, the issue I have with leaving the EU is that socialism needs money to get started. The Bolshevisk borrowed many millions of dollars from the western banking system to start the Soviet Union, whereas other socialist countries have raised funds from the sale of government owned natural resources. The lesson is, socialism works, but you need a lot of capital to get it started. This is very important - if you don't have money from outside the socialist system, it won't work.

crazytechnician's picture

Edit : "The lesson is, socialism works, but you need a lot of capital to get it started, it stops working as soon as that capital is depleted"

N2OJoe's picture

Haha and so the circus continues!

I wonder if the Greeks have any concept of "no taxation without representation" because after that referendum, even the most braindead socialist should understand what just happened.

(Not that we have any concept of that here in 'Murica either, but hey)

ATM's picture

Bankrupt: any insolvent debtor; a person unable to satisfy any just claims made upon him or her

philipat's picture

So what was it all about? What a waste of time and space and with NOTHING achieved. Unless, of course, that viisit by Nuland produced the desired effexts of worrying about 1) The longevity of his family, 2) His own longevity, 3) The brakes on his car and the fear of standing on tall buldings?

fx's picture

Tyler, you do not know yet anything what Tsipras proposed, yet you claim that he succumbed. WTF?!

 

smithcreek's picture

Gosh, and just two days ago when everyone here was so thrilled about "Greek democacy in action" I said "fuck the Greeks, let those lazy bastards AND the banks/governments that loaned them money rot" and was massively downvoted.

enforcer92677's picture

We get to see the Keynesian endgame in action.  It's a real treat :-)

Jacksons Ghost's picture

MDB, You can't believe your own blather. Worst Troll attempt I have ever seen. You have to work in academia, only place someone as dumb as this could survive.

Overfed's picture

Put a "/s" behind his posts, and all will become clear.

greenskeeper carl's picture

its fucking satire, people. come on. pretty damn funny if you ask me

BigJim's picture

I love it when people don't "get" MDB_

Reread what he wrote. You've been expertly trolled!

rbg81's picture

Euro's bitch?  I think it's the other way around.  Greece will get the $$ and do nothing.  Same old shit.

Kind of like Wimpy saying he will gladly pay you Tuesday for a hamburger today.  All lies.

Greece can't be allowed to break away because the entire EU would unravel and other dominoes would start to fall.  Much cheaper and less trouble to just pay them off.  

freewolf7's picture

I agree, except other countries are watching to see what the consequences are, and this whole thing is deteriorating. Consequences haven't been implemented. The EU is on life support.

Dame Ednas Possum's picture

How about a German referendum...

Same question as the Greek charade...

Same answer too no doubt.

Outcome...the banksters win.

Mae Kadoodie's picture

If you're so busy making money, why take the time and trouble to keep posting your precious thoughts here?  We're just the little people. 

EscapeKey's picture

you're back!

what are your thoughts on the chinese bubble?

 

MillionDollarBonus_'s picture

I think the lesson from the recent Chinese equity sell-off is that diversification is key. Everyone should invest their money in a well diversified portfolio that includes a heavy weighting of US treasuries because of their safe-haven status. I'm also surprised that anyone would choose to invest heavily in the Chinese stock market when the US stock market has been showing such excellent returns. We're also at the very beggining of an economic recovery, which is historically a very smart time to buy.  

EscapeKey's picture

excellent, excellent, and with profitability near its all-time high, how do you think corporate america can improve, given historical mean?

MillionDollarBonus_'s picture

I believe there are many opportunities for companies to exploit the social media revolution, as smart phone and tablet usage continues to rise globally. Some estimates predict smart phone ownerwhip to reach 2 Billion people by 2016, which will connect a staggering number of people to the modern economy. All of this spells opportunity for multinationals who will be looking to exploit new internet and mobile marketing channels to improve their bottom lines.

I also see global spending increasing as the consumer gains more confidence and governments align their fiscal policy with spending targets. This will also profoundly improve corporate profits.

fockewulf190's picture

7 years, untold trillions, and monsterous manipulations and we have just reached "the very beggining of an economic recovery". If you open up your front door, you may hear my epic laughter from the other side of the planet.

BringOnTheAsteroid's picture

You're even dumber than the religious fanatics that keep posting on ZH.

Ever heard of debt you bloody dill?

Ever thought for a moment that the purported recovery is a function of expanding debt and nothing else?

Do you understand the exponential function and the absolute impossibility for any system whether it be financial or biologicol to maintain any on going level of growth?

DEBT.

LOWER INTEREST RATES.

MORE DEBT.

EVEN LOWER INTEREST RATES.

EVEN MORE DEBT.

BANKERS PUT TWO AND TWO TOGETHER AND WRITE TRILLIONS IN DERIVATIVES BECUSE INTEREST RATES NEVER GO UP.

FUCKING BOOM - END OF THE FINANCIAL SYSTEM AS WE KNOW IT.

doctor10's picture

Which tripla-alphabet agency runs the MDB bot anyway?

rqb1's picture

It's sarcasm,  thanks MDB.

silverer's picture

Yes.  When you owe, you owe.  Seems no way off the hook for Greece.  So sit and think about that, and you have to wonder how or why it would work out differently for any other country that lands there.  The 108 trillion dollars of unfunded liabilities in the US comes to mind.  And when the system crashes, which it surely will, the US population will find out that the FDIC insures the banks first via the taxpayer, and the little guys last, meaning they will get nothing.  Remember the legislation Congress got paid to inject into the paperwork when they passed the last budget?  Another 45 trillion or so of bank derivatives are now FDIC insured.  They get paid before the 7 trillion or so on deposit by citizens.  And the account balance the FDIC has to make the payments?  Only about 65 billion or so.  This means that the future generations of the US will live in perpetual slavery, paying off 150 trillion or so in debt.  It's another way to make the rich richer and be in more control: make the poor poorer.  It's the most heinous crime perpetrated in human history, and absolutely has to end in bloodshed and death at some point for millions and millions of people.

Chartsky's picture

Yes silverer . . . exactly!

Bought-and-paid-for politicians snuck it into a Christmas Holidays piece of "routine" legislation -- and it was written by who?  Citi Lobbyists, I think.

The fact they snuck it in, when they did, and how they did, proves the politicians know what they're doing.  They're just going to keep sucking that "lobbyist" teat as long as they can and then point the finger at everyone else in a circle.  Democat-Republican has been nothing but professional wrestling for decades!

Sadly, most non-ZH readers have no clue what shape this county is really in.  All shiny and brightly painted red-white-blue on the outside and rusted through underneath.

No wonder TPTB want as many of us divided as much as possible:  blame the Democrats-Republicans, whites-blacks-browns, men-women, Christians-Muslims-Jews-Atheists, young-old, rich-poor, etc.

fockewulf190's picture

  "It's the most heinous crime perpetrated in human history, and absolutely has to end in bloodshed and death at some point for millions and millions of people."

More like billions. There are billions of people living on one dollar a day, and billions more living on two. When even that paltry amount vanishes into worthlessness, the culling will be an extinction level event.

Ghordius's picture

a Greek referendum is supposed to bind the Greek government, not the others

but the referendum was about Yes/No for an earlier, and retracted offer

no, Tyler, Greece is still a peer of the eurozone (and the EU). but interestingly the Greek Tsipras Cabinet has hardened the stance of practically all peers

so much for Varoufakis and his Game Theory, more useful for a different kind of conflict then this one

anyway, it's not over until the Greek Parliament has voted on it

Bank_sters's picture

It looks like you are proud of your kleptokratic bankster led Europe.    One where unelected banksters control the little people.   

 

 

Ghordius's picture

proud? the issue here is that we use the same word for bankers and central bankers

but if you take the FED as a template, it is natural to think that they are the same caste of "monetary priests"

if that would be true for the whole planet, we would not be in the middle of a currency war

the eurozone is a monetary alliance of 19 sovereign countries, with a fiscal pact among them

if you read carefully this last sentence... we might find common ground for a discussion. If not, there is no common ground and it's all "rah, rah, rah, them banksters rah, rah"

Bank_sters's picture

Does that fiscal pact include printing money,inflation, negative interest rates, and  placing technocratic govts in place?  

 

REally, Gordo?

Ghordius's picture

really, Bank_sters?

where is the price inflation here in the eurozone? is that "money printing" in the scale of what the FED and the Chinese national bank are doing?

we still have a currency war going on, with the US and China battling for monetary dominance, and that includes rates

last time we had a rate differential from the US, money market "managers" from the US flooded the eurozone with hot money from Granny's account, including derivative deals that produced the "And it's gone" from South Park

we had plenty of "technical" governments before the eurozone and the EUR, and we will continue to have this by-product of parliamentarism

tell me, is the Tsipras Cabinet a "technocratic" one?

at a certain point, the fog of propaganda should hit the realities. soon we'll be there, methinks

overmedicatedundersexed's picture

Ghordius, we all feel your desperation..buck up and count your gold and silver. oh and say high to your secretary..she hasn't posted in a while. lol, good luck we all are in need of same.

Bank_sters's picture

In order to protect the legitmacy of money printing and capital theft, you must pay us back every dollar we printed so we may pay back the banks who dine on your poor.   

Mario Draghi, Christine Lagarde and Jean Claude  Junker.