Greek PM Tsipras seeks 30% debt haircut, grace period for 20 years

A TV grab shows Greek Prime Minister's address Alexis Tsipras addressing the nation in Athens on July 1, 2015.
A TV grab shows Greek Prime Minister's address Alexis Tsipras addressing the nation in Athens on July 1, 2015.PHOTO: AFP

ATHENS (AFP, REUTERS) - Greece's Prime Minister Alexis Tsipras on Friday spelt out debt restructuring demands he wants international creditors to adopt, ahead of a weekend referendum he hopes will strengthen his position in negotiations.

In a television address, Mr Tsipras called for "a 30 percent haircut off the Greek debt" and "a 20-year grace period" for the rest, to ensure "the viability of debt" in Greece, which currently stands at nearly 180 percent of its gross domestic product (GDP).

He also said an IMF analysis showing Greece's debt is unsustainable justifies his government's decision to reject an aid package from creditors that offered no debt relief.

In the address to the nation, on the final day of campaigning ahead of Sunday's referendum, Mr Tsipras renewed his appeal to Greeks to vote against the bailout package and say'no' to blackmail and ultimatums.

"Yesterday an event of major political importance happened," Mr Tsipras said.

"The IMF published a report on Greece's economy which is a great vindication for the Greek government as it confirms the obvious - that Greek debt is not sustainable."

Opponents of Greece’s bailout terms have a 0.5 percentage-point lead over the ‘Yes’ vote, a poll by Public Issue for the Syriza-published newspaper Avgi showed on Friday.  The poll, carried out between June 30 and July 2, found 43 per cent of Greeks would vote ‘No’ in Sunday’s referendum on bailout terms while 42.5 per cent would vote ‘Yes’ and 9 per cent were undecided. 

Meanwhile,  the head of Greece’s banking association, said on Friday Greek banks have a “liquidity cushion” of 1 billion euros but funds beyond Monday depend on the European Central Bank.

 Greeks banks were shuttered on Monday for a week after the collapse of negotiations on a new aid deal to keep the country afloat, triggered by a government decision to call a referendum on the bailout terms.

“Liquidity is assured until Monday, thereafter it will depend on the ECB decision,” Louka Katseli told reporters. “The liquidity cushion we have is about 1 billion.”