Greece pledges reforms and requests financing from the ESM

The Greek authorities have yesterday made the commitment to make reforms in the fiscal sector and of the pension system, "starting next week", and in return asking for a three-year loan from the European Stability Mechanism (ESM), according to the announcement made by the new Greek finance minister, Euclid Tsakalotos.

He has sent a letter to the president of the ESM, which has been made public. The minister has officially asked for a three year loan for Greece, instead promising a package of reforms and measures "that would guarantee the stability of public finances and long term growth".

ESM officials have confirmed having received this letter from Greece.

Endowed with 700 billion Euros, the ESM has issued bonds to help the Eurozone member states, during the peak of the sovereign debt crisis.

Greece's request came after a summit of the leaders of the Eurozone, which was held Tuesday in Brussels, when Sunday had been set as a deadline for making a decision on a new aid program intended for Greece. According to some sources quoted by Reuters, Greece's request addressed to the ESM does not mention the size of the loan that the Greek authorities want to receive.

The new Greek finance minister has expressed his lack of faith in the Eurozone member countries and warned that the loan is urgent, given the "fragile situation of the banking system and the lack of liquidity" in his country.

"This letter replaces the proposals which Greece made its partners on June 30", the minister said.

On June 30, the Greek government sent proposals concerning the new aid plan, which the creditors declined to discuss before the referendum held last Sunday in Greece. The proposals were presented by Tsakalotos' predecessor, Yanis Varoufakis, who resigned on Monday, after the Greeks voted against the creditors' terms.

• Tsipras: "The Greek governments have created a clientelistic system"

Greek prime-minister Alexis Tsipras yesterday pleaded, in the European Parliament, for a true reform of the Greek state, discussing the fact that for years, the various governments in his country have created a state based on clientelism, in which corruption has been allowed.

Tsipras said that Greece has an agreement with its European partners, to show the possibility of exiting the crisis. "The burden will have to be borne by those who can bear it, and who have been protected over the last five years", the prime-minister said, and he added that until now, the burden has been placed on the shoulders of those who work.

Tsipras mentioned that 10% of the Greek citizens hold 56% of Greece's wealth, and in this period of crisis and austerity they have contributed nothing.

Tsipras said that the new proposals to the creditors concern a real reform of the way the country works. "We have to fight against tax fraud and evasion and also stimulate the creation of new jobs", the Greek prime-minister said.

• BCE: Greek banks will not receive emergency funds in the absence of a deal with creditors

Greek banks will not receive emergency loans anymore through the ELA facility of the European Central Bank (ECB), if the Government doesn't succeed in reaching an agreement with the creditors, Christian Noyer, member on the Board of Governors of the ECB.

He warned that the deal must be struck by July 12th, otherwise "it would be too late and the consequences would be grave".