Greek Prime Minister Alexis Tsipras has until midnight Thursday to present his European colleagues with a detailed economic package to convince them that Greece can keep the euro.
In his first address to the full European Parliament in Strasbourg, Tsipras said his government would present concrete and detailed overhaul measures on Thursday. The Greek PM insisted he has "no hidden agenda" to drive Greece out of the euro and that last Sunday's referendum in which Greeks roundly rejected more belt-tightening reforms does not mean a break with Europe.
Tsipras's government submitted a request to the European Stability Mechanism bailout fund (ESM) to lend an unspecified amount "to meet Greece's debt obligations and to ensure stability of the financial system". It promised to begin implementing tax and pension reforms as early as Monday in exchange for loans. What was missing were specifics.
The ESM has begun the formal process of reviewing the request, which will be followed with more details by the end of Thursday. A spokeswoman for the EU said the deadline for Greece's proposals was midnight.
Without some new cash in the coming weeks, Greece won't be able to make a €3.5 billion bond payment to the European Central Bank (ECB) on July 20. The ECB is now keeping Greek banks in a state of suspended animation: alive, but unable to get their hands on additional emergency funds beyond the €89 billion they have already taken.
But if Greece misses the July 20 payment, the ECB is widely expected to cut them off entirely; a move that would send the country's financial system into meltdown and force the government to print its own money to recapitalize them or to issue IOUs (a form of alternative mean of payment so that the state will be able to pay salaries, pensions and suppliers).
Even if Tsipras endorses a bailout deal that defies his election pledge to end the austerity he will face opposition within his radical left Syriza party. Nevertheless by winning Sunday's referendum Tsipras shored up his domestic position. Moreover the meeting he held Monday with opposition political leaders gives him confidence that he can rely on opposition parties to secure enough parliamentary votes to approve any new bailout deal.