Greek crisis: new bailout request filed – as it happened

Graeme Wearden (now) and Jennifer Rankin (earlier)

from on 2015-07-08 19:03 (#DN08)

8.10pm BST

PS: The Greek banks aren't opening until Sunday's summit has taken place....

State TV in Greece: 60 euro ATM withdrawal limit extended til Monday. / No surprise at all. Without help, had no other choice.

8.02pm BST

The Greek crisis seems to have calmed down tonight, so let's do a summary. We'll lurch back into life if there are major developments.

#Greece: #ESM rescue fund asks "Troika" to analyse #Athens demand for new 3yrs loan. 2nd step. http://t.co/32T9IRiydJ pic.twitter.com/DZw2ruA5ta

"Time is short, but France will ensure that Greece is encouraged to produce as precise a plan as possible to inspire trust, that trust that is indispensable if the Eurogroup (of euro zone finance ministers) is going to be able to give its position.".

We were in a fiscal stranglehold, we were thinking more about how to keep the economy alive.

We have ideological differences, we are divided on issues, but this is a crucial time to be able to pool our forces.

Tomorrow once again we are going to come up with some very specific proposals.

Citi economists change view on Greek exit from euro: "now believe that Grexit... is the most likely outcome" pic.twitter.com/CVznX29c6V

7.44pm BST

Alexis Tsipras's meeting with president Prokopis Pavlopoulos looks rather pleasant, given he was explaining how Greece could be facing the eurozone exit door on Sunday:

7.32pm BST

Alexis Papahelas, the prominent political commentator has just told SKAI News:

"It is clear Greece is tragically isolated. The prime minister spent a nightmarish last night in Brussels," he said adding that the atmosphere had much improved with Euclid Tsakalotos in the finance minister's seat.

"The French are doing very important things for Greece."

7.27pm BST

We're hearing that Alexis Tsipras's meeting with the Greek president has ended.

He's now headed off for talks with the Stavros Theodorakis, the leader of the centrist To Potami party:

Following meeting with President Pavlopoulos, #Greece PM #Tsipras will meet with To Potami leader Theodorakis in 20 mins. #politics

7.15pm BST

Greece is under intense pressure to table a last-chance blueprint for radical economic reform, tax increases and spending cuts on Thursday in order to secure a future in the euro and stave off financial collapse, writes our Europe editor Ian Traynor.

6.54pm BST

Weird: Guy Verhofstadt (!) has gone viral. 20,000 shares on Facebook for his Tsipras takedown. https://t.co/IyPusdvmK5

If you're just tuning in you can see Verhofstaft's speech here.

6.51pm BST

Over in Athens the Greek government has announced that prime minister Alexis Tsipras will visit the country's head of state, president Prokopis Pavlopoulos, "immediately," reports Helena Smith.

"the prime minister will visit the president of the republic immediately in order to inform him of the latest developments."

6.41pm BST

Over in Athens there is mounting concern that freedom of speech has begun to pay a heavy price as the crisis deepens.

"We failed to see that the crisis was coming. Now journalists are asking the right questions, sometimes there is exaggeration but they are basically saying 'look something is wrong, very wrong' and for that they are being punished, deliberately hounded and silenced."

"The regime mentality that has evolved in certain centers of power is cause for grave concern and it is just a matter of time before it becomes a real threat to democracy and everything it holds truth."

6.24pm BST

Latvia's central bank governor, Ilmars Rimsevics, doesn't share Manuel Valls optimism that a Greek deal is within reach.

He told Latvian TV that:

It's one thing to put an plan on the table but implementation is something else. Why should people believe that the new proposal will be for real?"

"It's hard to imagine what Tsipras could offer to the Eurogroup today or tomorrow."

6.12pm BST

The French PM is now love-bombing the Greek people by tweeting in their language:

Au peuple grec, je dis : I IIIIII IIIII^1 I II...IIII ! MV

To the Greek people , I say: Greece is Europe!

5.54pm BST

5.17pm BST

Greece's request for a third bailout has now been passed onto the European Commission and the European Central Bank.

Eurogroup president Jeroen Dijsselbloem has asked them to assess Greece's financing needs, the risk it poses to the eurozone, and the sustainability of its public debt:

I- IIIIIIIfI III... ESM IfII IIIIII^1II IIIII1/4I I^3I^1I I^2II(R)III^1I #ESM #Greece #GreeceCrisis #breaking # pic.twitter.com/cHJa3AJn2z

4.59pm BST

Hello.... the eurozone finance minister's conference call that was cancelled this morning might be back on again:

#Eurogroup to hold conference call on Greece this Wednesday evening, RTRS reports.

4.51pm BST

Bloomberg is reporting that the European Central Bank has left Greece's emergency liquidity support unchanged.

*ECB SAID TO LEAVE CAP ON GREEK EMERGENCY BANK AID UNCHANGED

#ECB said to leave cap on Greek emergency bank aid unchanged, BBG reports. pic.twitter.com/MO0WXQ5P2X

4.32pm BST

Guy Verhofstadt's speech on Greece this morning has now been uploaded to YouTube, and it's worth watching.

As we covered this morning, the leader of the liberal group in the European Parliament tore into Alexis Tsipras, criticising him for talking about reforms but never delivering.

"How do you want to be remembered? As an electoral accident who made its people poorer? Or as a real revolutionary reformer?

Show that you are a real leader and not a false prophet."

Anyone started a petition for @GuyVerhofstadt to run for office in #greece yet? https://t.co/efqSXv4QGO

4.19pm BST

The French government's optimism over Greece is not shared by its counterparts in Berlin, by all accounts.

So, Manuel Valls' claim that a deal is "within grasp" may actually highlight the fracture between the eurozone's largest members.

There is a strong possibility that the deal is agreed and then voted down in national parliaments.

[Valls' comments] imply Germany and France are on a totally different page of the book..... [therefore] Germany leaves?

#France/'s PM Manuel Valls says there'll be a vote in parliament if there's an agreement with #Greece. #EU #Eurozone

4.04pm BST

This weekend will be absolutely crucial for Greece, the French prime minister adds:

Valls: "On Thursday, #Greece will present us proposals, Saturday we will reconvene. The destiny of Europe is at stake." @franceinfopol

3.59pm BST

France continues to be Greece's staunchest ally in the battle to avoid Grexit.

"Keeping Greece in the euro and therefore in the heart of Europe and the EU is something of the utmost geostrategic and geopolitical importance,

"Allowing Greece to exit the euro zone would be an admission of impotence - France refuses that."

3.42pm BST

The head of Britain's fiscal watchdog has warned that the UK economy will suffer if the Greek crisis escalates.

Robert Chote, head of the OBR, made the comments as he responded to today's UK budget:

OBR fcasts not adjusted for Greece effect but Chote says: if confidence across eurozone is hit by events there "UK would be affected"

2.43pm BST

The penny, euro, or possibly drachma has dropped in the City.

Economists now believe there is more chance of Greece leave the eurozone than staying.

* Reuters poll shows for first time economists now say greece's exit from Euro zone is more likely than not

* Reuters poll-median 55 pct probability of Greece leaving Euro zone: economists (45 pct last week; first ever over 50 pct)

2.39pm BST

US Treasury secretary Jack Lew appears to have thrown his weight behind calls for a Greek debt restructuring.

Speaking at the Brookings Institution in Washington DC, Lew warned that Greece's debts are not sustainable, echoing the IMF's concerns. He pointed to a "deep" reluctance among some European countries to face up to the issue, though.

*LEW: IMF CORRECT TO FOCUS ON GREEK DEBT

US Treasury Secretary Lew, for the first time, says Europe must restructure Greek debt because it's not sustainable. http://t.co/jX6NhC8IyG

2.29pm BST

Finland's finance minister tweets:

5-5-5. Five difficult years. Five mixed months. Five intersting days. A solution has to be found by Sunday. One way or the other. #Greece

2.24pm BST

European Commissioner Pierre Moscovici has just been interviewed on Bloomberg about Greece.

Time is running short, time is very short, says Moscovici.

*MOSCOVICI SAYS GREECE NEEDS HUMANITARIAN AID *MOSCOVICI EXPECTS `A CREDIBLE SET OF REFORMS' FROM GREECE

Everyone must be aware that this country has lost 25% of its GDP, that 25% are unemployed, that half the youth are unemployed.

EU's Moscovici: To address debt question in due time ~BBG #Greece

2.08pm BST

Greece hasn't put a figure on the new bailout it is looking for, but it would easily be north of a50bn.

The FT's Peter Spiegel explains:

The International Monetary Fund has estimated a three-year programme could cost as much as a70bn.

Although the IMF has urged some kind of debt relief, eurozone creditors have fiercely resisted any kind of write-down - though they have been more open to extending the repayment schedules for their current bailout loans. The Greek request is certainly not a table thumping demand, rhetorically. But the intention is certainly clear.

For those who haven't seen it yet, leaked copy of #Greece's new bailout requeset letter (w/my analysis) posted here: http://t.co/psBMkN70Mt

1.54pm BST

While the European Parliament debate was raging, Greece quietly submitted its formal request for a new aid package in an attempt to avoid crashing out of the eurozone.

Finance minister Euclid Tsakalotos has asked for a three-year programme, from the bailout fund (the European Stability Mechanism). And in return, Greece would commit to:

"to a comprehensive set of reforms and measures to be implemented in the areas of fiscal sustainability, financial stability, and long-term economic growth."

Greece welcomes an opportunity to explore potential measures to be taken so that its official sector related debt becomes both sustainable and viable over the long term.

Greek letter to ESM is here http://t.co/w2Vv7x1QKc pic.twitter.com/CE9SJEceDV

1.48pm BST

There were high jinks in the European Parliament this morning -- UKIP's Nigel Farage aligned himself with the Greek "No" campaign by carrying one of their famous OXI signs, until the EC president confiscated it.

#Juncker just scored against populists in European Parl: #Farage had #OXI banner. #Juncker went to him & took it away. @JunckerEU #Greece

1.47pm BST

Extending the Greek bank holiday until Friday night is not a pledge that they'll reopen on Monday, of course:

#Greece pushing out their bank holiday as to be expected given the Eurogroup on Sat & EU summit on Sun.... question is what happens Monday?!

1.23pm BST

It always seemed unlikely that Greece's banks would reopen before Sunday's emergency summit.

And Reuters is now reporting that the current 'bank holiday', due to expire on Wednesday night, will be extended further.

***Greece to issue ministerial decree on Wednesday to extend bank holiday - government source - RTRS

1.12pm BST

The work never stops if you are Europe's most powerful leader.

After Tuesday's fractious summit in Brussels, Angela Merkel was back in Berlin for a meeting with her cabinet this morning. She is pictured here with Sigmar Gabriel, her vice chancellor, who warned Greeks they had "torn down the last bridges" by voting against the EU bailout plan.

Greece's debt crisis is inflicting hardship on Greeks but the shockwave is fanning out too into its ex-Communist neighbours which are economically dependent on Greece and, because they are poorer, even less well equipped to deal with the consequences.

The potential impact on countries such as Albania, Kosovo, Serbia, Macedonia and Bulgaria is likely to be on the agenda of German Chancellor Angela Merkel - a central player in the Greek debt drama - when she visits the region starting on Wednesday.

12.51pm BST

The European Commission is fielding questions from journalists in Brussels at its daily briefing.

A spokeswoman says there will be no briefings on Grexit, because the Commission is not planning on this scenario.

12.28pm BST

Donald Tusk is playing the peacemaker in his final remarks to the European Parliament.

He says the source of the crisis in Greece is over-spending not the common currency.

Seek help among your friends and not among your enemies, especially when they are unable to help you.

If you want to help your friend in need do not humiliate him.

We need unity not because unity is a beautiful ida but because unity is indispensable to take decisions.

This is really and truly the final wake-up call.

12.24pm BST

Jean-Claude Juncker is now making his closing remarks.

Once again, he is defending the European Commission that he leads.

12.21pm BST

Back at the European Parliament, Alexis Tsipras is defending himself against earlier attacks from MEPs.

He admits that over the last five month his government has spent more time negotiating than governing.

We were in a fiscal stranglehold, we were thinking more about how to keep the economy alive.

I want your support to help change Greece... We all understand that this debate is not exclusively about one country. It is about the future of our common construction, the EU and Europe

We have ideolgical differences, we are divided on issues, but this is a crucial time to be able to pool our forces.

Tomorrow once again we are going to come up with some very specific proposals.

Sophocles taught us that the greatest law of all human laws is justice... and I think that is something we have to remember.

12.10pm BST

Foreign journalists have been arriving en mass in Athens over the past few weeks.

The Guardian's Emma Graham-Harrison touched down earlier today in the Greek capital, where she found little sign of the political turmoil shaking the country.

In the arrivals hall at Athens airport there seemed little sign of a slowdown in summer tourist traffic, with long lines for passport control, a crowd jamming the arrival hall and lines at ATMs just two or three people long -- no more than you would expect at a busy airport.

A taxi driver (the mainstay of lazy foreign reporting I know, but they are on the front lines of the tourism industry) said a few repeat customers had decided to put holidays on hold but overall arrivals only seemed to be down by a fraction on this time last year

11.32am BST

Journalists and pundits watching Alexis Tsipras's speech to the European Parliament do not sound convinced he helped his cause.

11.25am BST

News just in: today's meeting of eurozone finance ministers has been cancelled.

A spokesman for Jeroen Dijsselbloem, the Dutch finance minister, who chairs the eurogroup, announced the conference call would not take place as planned.

Request for ESM support received from Greek government, will be dealt with EWG today. No #Eurogroup teleconference #Greece

11.14am BST

Here are some pictures of Mr Tsipras's trip to the European Parliament in Strasbourg.

10.51am BST

So has Greece submitted its new bailout proposal to finance ministers or not?

Earlier reports suggested it didn't arrive overnight, but it's not clear if it has yet landed in ministerial inboxes.

Ok. Now told definitively that #Greece's new bailout request letter HAS been received. Gentlemen, start your engines...

10.23am BST

Over in Athens the political opposition is demanding that party leaders reconvene for an emergency meeting to discuss the ultimatum the Greek government now faces. Our correspondent Helena Smith reports

Anxiety in Athens this morning is almost palpable. Among a political elite who would have played the game very differently, there is mounting concern that one wrong move and Greece will not only be headed for euro exit but years of purgatory on the periphery of Europe.

10.09am BST

Nigel Farage is on his feet now.

The European project has started to die.

The plan has failed. The whole of the Mediterranean finds itself in the wrong currency.

If you have got the courage you should lead the Greek people out of the eurozone with your head held high.

Yes it will be tough for the first few months, but with a devalued currency and friends all over the world you will recover.

9.59am BST

Verhofstadt in full flow.

9.56am BST

Verhofstadt's speech doesn't seem to be easy for the Greek prime minister to listen to.

9.55am BST

Guy Verhofstadt, the leader of the liberal group in the European Parliament, warns that Europe "is sleepwalking towards a Grexit".

He is laying into Tsipras for not coming up with detailed reforms.

I am even ready to come to Athens to discuss it with because I like such a challenge.

There is never such a prime minister in Greece who has such a strong mandate as you.

You need to come forward with your reform pacakge, it is not a chicken or egg situation.

9.44am BST

The European Parliament debate on the Greek bailout crisis continues here.

I will round up reactions a little later.

9.39am BST

More from Manfred Weber

9.35am BST

German conservative MEP Manfred Weber goes straight on the attack in his response to Tsipras.

He refers to Greek government ministers who have talked of sending migrants to other European countries and accused their European creditors of terrorism.

If the prime minister of Greece comes to us he should apologise for those utterly unacceptable statements... he has passed over them in silence.

You are destroying confidence in Europe

9.31am BST

I'm battling with the live-feed, but picked up Tsipras's final soundbite.

This is not exclusively a Greek problem, this is a European problem and European problems require European solutions.

9.26am BST

9.23am BST

Tsipras says Greece needs an agreement with its neighbours that "shows there is light at the end of the tunnel" and brings credible and necessary reforms.

Over the last five years, he says, reforms have been put in place that have been burdensome on the Greek people.

We must have a basis in which we an succeed on the basis of sustainable development.

9.18am BST

So far, the Tsipras speech sounds as if it is aimed at a domestic audience.

9.15am BST

Greek prime minister Alexis Tsipras is now up.

A few days after this verdict we have now been given a mandate to re-double our efforts in order to get a socially-just and economically sustainable solution.

9.12am BST

Now Jean-Claude Juncker of the European Commission takes his turn to address MEPs. The live feed is fading in and out, so I will turn to the quick smart tweeters in Strasbourg/with bigger bandwidth to fill the gaps.

9.08am BST

Tusk is calling on EU leaders to search for a consensus, in remarks almost word-for-word the speech he gave last night.

He strikes a conciliatory tone:

All sides of the negotiations share the responsibility for the status quo.

Our inability to find agreements may lead to the bankruptcy of Greece and the insolvency of its banking system.

I have no doubt that this will affect Europe, also in a geopolitical sense.

As Plutarch once said: "to find fault is easy, to do better may be difficult"... let us prove him wrong.

9.03am BST

Donald Tusk, president of the European Council, is speaking first.

He starts with the usual pleasantries to Luxembourg, the country that has just taken up the six-month presidency of the EU.

We meet at a unique and difficult time for Europe and our monetary and economic union.

It was the first time European leaders had an honest exchange on the refugee question.

8.58am BST

Here is a scene from the Parliament.

8.55am BST

European Council leader Donald Tusk has just entered the European Parliament's plenary session in Strasbourg, so it looks as if we will soon begin.

8.54am BST

The denial follows a report in Kathimerini that the government was preparing to introduce a parallel currency to the euro. Unnamed sources told the paper the finance ministry was considering an IOU currency in case Greece failed to secure a deal.

8.40am BST

The Tsipras/Juncker/Tusk speeches at the European Parliament will get underway at 9.45am (8.45 British summer time), so we will have to wait a little longer.

In the meantime, Ryan Heath of Politico has come up with some questions he thinks Alexis Tsipras must answer.

8.35am BST

The Greek prime minister Alexis Tsipras will be speaking to the European Parliament in Strasbourg in the next few minutes.

We are also expecting to hear from Jean-Claude Juncker of the European Commission and Donald Tusk, who chairs the European Council of EU leaders.

8.21am BST

The European Central Bank has warned that failure to reach an agreement on Sunday, will leave it with no choice put to pull the plug on its support for Greek banks.

Christian Noyer, a member of the ECB's decision-making governing council, said Sunday was the last chance to reach a deal and avoid "catastrophe" for the Greek economy.

The Greek economy is on the brink of a catastrophe. There must be an agreement next Sunday [12 July] at the very latest. After that it will be too late and the consequences will be grave.

I fear that if there is no agreement on Sunday the Greek economy will collapse and there will be chaos.

We have rules and we have interpreted the rules to their limit to maintain a lifeline to Greek banks, but we cannot continue indefinitely to increase the risks we are taking.

8.03am BST

The Guardian's G2 cover story looks at the one practical way everyone can help Greece: go there.

The weather is just as stunning as it ever was this time of year; the archaeological sites just as interesting; the beaches just as magical; the food just as heart-healthy. The prices are significantly cheaper than usual. It is one of those rare everybody-wins situations.

The people are even more welcoming, more hospitable and more grateful than ever. The reaction to difficulty has been a broader smile, a wider embrace. We understand that you have a choice and we understand why you have chosen Greece right now. Tourism is liquidity. Tourism is solidarity.

7.56am BST

Opposition leaders in Greece are anxiously watching the twists and turns of talks in Brussels, Berlin and Paris.

As Kathimerini reports the political council of the centre-right New Democracy party met for the first time since Vangelis Meimarakis replaced Antonis Samaras as leader. Samaras was a prominent voice on the yes side in the referendum and fell on his sword as soon as the results became clear.

The government does not have a mandate for rupture [with lenders] but one for bringing back a viable agreement.

7.46am BST

Analysts at Deutsche Bank are sounding a smidgeon more hopeful that an agreement between Greece and its creditors can be reached.

But they think Greek prime minister Alexis Tsipras will have to sign up to even stricter conditions to get bailout cash, because the Greek economy has worsened in recent days, increasing the country's financing needs.

The Europeans last night set the framework around which Greece's Eurozone exit can be averted: Greece effectively has to negotiate the outline of a new 3rd ESM [European Stability Mechanism i.e bailout] program by the end of the week. Whether the Greek side is prepared to accept this remains an open question. Last week's referendum has politically empowered the Prime Minister, who has the political capital to vote an agreement through parliament. At the same time, it is likely that the level of policy conditionality required from the Greek government is even tougher than before the referendum. As things stand, we attach a marginally higher probability to a post-midnight agreement being reached: the support for Eurozone membership in Greece is clear and the political and economic costs of capital controls are rising. But it is a close call. The future of Greece's position in the Eurozone is likely to be decided by the end of the week.

7.34am BST

To break away from Greek news for a moment: we've just heard the boss of Barclays bank has been sacked.

Can anyone think of a replacement?

7.23am BST

A deal is possible, says Pierre Moscovici, France's European commissioner and perennial optimist on the Greek debt talks.

Yes, an agreement is possible, essential. We must avoid avoid Grexit. The ball is in Greece's court .

There is urgency about Greece. We are awaiting proposals and concrete reforms.

Greece's place is in the eurozone. The door of the European Commission remains open.

7.21am BST

Nobody knows whether EU leaders can find a way out of this mess.

Under the best case scenario, Greece could have a new bailout ready by mid August.

Tuesday night's decisions in Brussels portend several days of frantic, round-the-clock negotiations. Athens is expected to ask for a new bailout programme worth up to a60bn over two to four years as well as measures to reduce its ballooning debt.

The chances of securing a deal hinge on the levels of cuts, austerity, and fundamental reforms of economic and fiscal systems that the Greek government is prepared to endure after Tsipras stonewalled for five months and then called his snap referendum.

7.18am BST

Good morning and welcome to our rolling coverage of the Greek debt crisis.

Europe has days to agree a plan that will enable Greece to stay in the eurozone and stave off bankruptcy.

If someone has any illusion that it will not be so, they are naive.

The stark reality is that only have five days to find the ultimate agreement.

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