A Deadline Looms on the Austerity Experiment - Greece
Greece faces a Thursday deadline to present to creditors a proposal of reforms to addressing the nation's debt in exchange for for new credit. But whether or not the Greek plan would be accepted by creditors, remains suspect ahead of a euro zone ministers meeting slated for Saturday, and a broader European Union(EU) summit on Sunday.
As cash-starved Greek banks remain closed limiting ATM withdrawals to $67, any new Greek plan would not deviate very much from what the government has been advocating, including the retention of a sales tax discount for the Greek isles and a delay to the process of raising the retirement age.
But with Greece running out of cash, and with the refusal of the European Central Bank(ECB) to raise the amount of funds it allocates for floating Greek banks, Prime Minister Alexis Tsipras must be under increasing pressure to make further concessions to creditors. Yet, Tsipras must be mindful of last Sunday's vote that rejected the proposals of international bankers.
However, with regards to Greece remaining in the euro zone and in the larger EU, that decision appears dependent upon the European Stability Mechanism accepting a Greek request for a three-year-loan in exchange for reforms.
Speaking before the European Parliament at Strasbourg, Prime Minister Tsipras, as reported by the BBC-News, said any deal with creditors had to offer prospects of growth and had to include discussion of Greek debt. He told European parliamentarians: "Let's not let Europe be divided."
The Greek leader said previous bailouts had turned his country into an "austerity laboratory" and "...this experiment...has not been a success."
Hence, Greece expects different terms to remaining in the euro zone and unless a deal is reached by Thursday, Greece will run out of cash by Monday and would be forced to venture solo into unprecedented fiscal territory.