Greece inches towards third bailout

A man browsing inside a thrift shop in central Athens. Greece is seeking a three-year bailout worth up to €86 billion (S$128 billion) to avert a financial meltdown. The country had initially planned to go without fresh help from the IMF.
A man browsing inside a thrift shop in central Athens. Greece is seeking a three-year bailout worth up to €86 billion (S$128 billion) to avert a financial meltdown. The country had initially planned to go without fresh help from the IMF.PHOTO: REUTERS

ATHENS • Debt-crippled Greece on Friday took a step closer to a third international bailout by formally requesting help from the International Monetary Fund (IMF), but sources said "logistical problems" were delaying the start of talks in Athens.

Greece is seeking a three-year bailout worth up to €86 billion (S$128 billion) to avert a financial meltdown and chaotic exit from the euro zone.

It had initially planned to go without fresh help from the IMF as it considers the agency too wedded to draconian austerity measures. But in a letter to IMF chief Christine Lagarde, Finance Minister Euclid Tsakalotos wrote that Greece was "seeking a new loan" from the IMF. He noted that the Greek Parliament has passed two laws enshrining a series of tough reforms demanded by the creditors, including tax rises and a pensions overhaul, to pave the way for the new deal.

The IMF confirmed receipt of the request, saying that it will discuss with Greek and European Union authorities "the timing and the modalities" of talks on the next bailout. The request came amid an apparent delay in getting the ball rolling on talks to finalise the package. Negotiators from the creditors have not set foot in Athens for more than a year as hostility has grown between the two sides.

Greece had said that negotiators were scheduled to fly to Athens on Friday to begin the talks, but this swiftly became "in the coming days", according to a European Commission spokesman, with the location of the talks and offices for the creditors apparently among the sticking points.

"The mission is being prepared. We are still discussing a location as we have to find an accessible place to work, near the ministries," a source close to the negotiations said.

The two sides are under enormous pressure to hammer out the rescue deal before Aug 20, when Athens is scheduled to make a loan repayment of €3.2 billion to the European Central Bank that it cannot currently afford.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Sunday Times on July 26, 2015, with the headline 'Greece inches towards third bailout'. Print Edition | Subscribe