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Tsakalotos expects ‘many’ of Greece’s demands to be accepted

Alexis Tsipras’s government to face vote in parliament later on tonight

10 July 2015, 6:56pm
Greek finance minister Euclid Tsakalotos
Greek finance minister Euclid Tsakalotos
Greek Finance Minister Euclid Tsakalotos is confident that "many" of Greece’s demands for debt relief will be accepted by eurozone partners, which are weighing a bailout proposal.

"Many of Greece's debt demands are going to be accepted," he told a parliamentary commission examining the plan.

AFP reported that Tsakalotos expressed confidence that Greece will be permitted to roll over a debt of 27 billion euros ($30 billion) in bonds held by the European Central Bank to the European Stability Mechanism, which would push back repayments.

The Greek government tonight faces a vote in parliament authorising it to negotiate on the basis of his  proposals. Tsipras is expected to carry the proposals thanks to support from opposition parties.

Tsipras, whose Syriza party is a complex kaleidoscope of leftist movements, has tried to head off a challenge by telling his MPs "we face critical decisions".

"We either carry on together or we all leave together," he said, according to state news agency ANA.

The plan presented to Brussels today is almost identical to the one Greeks rejected by over 61 percent last Sunday in a referendum.

Greece has already defaulted to the International Monetary Fund and has to repay the European Central Bank 4.2 billion euros ($4.7 billion) on July 20 with state coffers nearly dry.

Greek banks have also been shut for nearly two weeks, disrupting market operations and raising the fear of shortages as the public is limited to daily 60-euro ATM withdrawals.

The Eurogroup will tomorrow discuss the recent request by the Greek authorities for financial assistance from the European Stability Mechanism (ESM) and their new proposals for a reform agenda. The European Commission, the European Central Bank (ECB), and the International Monetary Fund (IMF) will present their assessment of risk to financial stability in the euro area, Greece’s financing needs and the sustainability of its public debt.

Based on this assessment ministers will exchange views on whether there is a sufficient basis to start formal negotiations on a new financial assistance programme for Greece.

“ESM financial assistance programmes are negotiated by the Commission, in liaison with the ECB, on the basis of a mandate by the Eurogroup. When possible, active participation of the IMF is sought,” the formal agenda of the Eurogroup reads.

Credit rating agency Fitch has also given its interpretation of the situation: “Greece’s strong argument in favour of greater accommodation on the part of creditors faces several hurdles that are likely to prove collectively insurmountable. The referendum might have tipped the balance of how other eurozone countries weigh the risks of Greece’s continued membership in the common currency area versus its exit, but this may become clear only once the history is written.”

According to Reuters, European stocks surged on Friday after Greece made substantial concessions in its latest bid to win new funds from creditors and avert bankruptcy.

Global equity markets also took heart from a continued recovery in China’s stock market, which rose strongly for a second day, buoyed by a barrage of government support measures.