Bailout conditions: Greece gears up for referendum

Prime minister calls for 30% cut on debt and 20-year grace period for the rest

Afp July 05, 2015
An anti-austerity demonstrators attend a rally in Trafalgar Square in central London on July 4, 2015 in solidarity with those voting 'No' in Greece's forthcoming referendum. Greece braced itself Saturday ahead of a make-or-break bailout referendum as polls showed the 'Yes' and 'No' camps neck and neck and uncertainty rose over the future of the country's battered economy. AFP PHOTO

ATHENS: Greece and the entire eurozone are in limbo as the country gets set for a referendum on bailout conditions on Sunday.

Greece was officially declared in default on Friday by the European Financial Stability Facility, which holds €144.6 billion ($160 billion) of Greek loans.

Athens has just missed an IMF loan payment deadline, the first time that has happened to an industrialised country. If it defaults on a July 20 payment to the ECB, Greece might have to withdraw from the 19-nation eurozone.

On June 27, Prime Minister Alexis Tsipras had called a referendum on whether or not to accept the terms of the latest round of bailout aid.

The IMF estimated that Greece needs €50 billion over the next three years, including €36 billion more from EU lenders, and debt relief to stabilise its finances.

Tsipras called for a 30% cut of the Greek debt and a 20-year grace period for the rest. The total Greek debt is €323 billion, or nearly 180% of its gross domestic product (GDP).

European Commission chief Jean-Claude Juncker has said that Greece’s negotiating position with creditors would be dramatically weakened in the event of a ‘No’ vote in the referendum.

Published in The Express Tribune, July 5th, 2015.

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