The Greek government has put forward a plan for the country’s economic overhaul to bailout authorities yesterday (9 July) evening, according to FTAdviser sister publication the Financial Times.
The plan for how to turn the country’s fortunes around is part of a request for a new three-year bailout that Alexis Tsipras, prime minister of Greece, must agree by the weekend.
If it cannot be agreed, the Greek banking sector faces a collapse that industry commentators predict would result in the country exiting the EU’s common currency.
Some members of Mr Tsipras party raised objections that the plan crossed “red lines”, with Greek media reporting that he told the cabinet: “We are ready to compromise.”
The submission opens a razor-thin 48-hour window in which Greece’s bailout monitoring institutions must evaluate the plan before it is turned over to eurozone finance ministers on Saturday. They will then decide whether it is sufficient to launch negotiations on a third bailout, which officials said could amount to more than €70bn (£50.4bn).
Yesterday (9 July), Chris Beauchamp, senior market analyst at IG, said equity markets rebounded with evident relief among investors that the Greeks have actually managed to submit their loan application. “Now we have to wait for the creditors to decide whether Athens has made enough concessions.
“Signs of unhappiness at the proposed deal could easily reverse the good feeling seen so far yesterday morning, but for now markets just appear to be pleased that negotiations are underway once again.
He added: “Having stared into the abyss, there may now be just enough willingness to strike a deal that will take the Greek problem off the agenda for a few months at least.”
The Greek government has said banks will be closed until at least midnight on 13 July and implemented restrictions on its banking system.
The UK’s Department for Work and Pensions stated that international payments into Greece are exempt from these restrictions, with state and public service pension payments continuing to be made into Greek accounts in the usual way.
“The situation remains fast moving and uncertain, and the government recognises customers may be concerned,” read a statement, adding that the DWP will attempt to contact people that draw a British State Pension from a Greek bank account and help people to switch these payments to a non-Greek bank account if they wish.
emma.hughes@ft.com
