Greek loan request may avert euro exit

Athens asks for financing for six more months in face-saving move

GREECE formally requested a six-month extension to its euro zone loan agreement yesterday, offering major concessions as it raced to avoid running out of cash within weeks and overcome resistance from sceptical partners led by Germany.

With its EU/IMF bailout programme due to expire in little amore than a week, the government of leftist Prime Minister Alexis Tsipras urgently needs to secure a financial lifeline to keep the country afloat beyond late March.

Euro zone finance ministers will meet today in Brussels to consider the request, the chairman of their Eurogroup, Jeroen Dijsselbloem, said.

That raised hopes of a deal to avert possible bankruptcy and a Greek exit from the 19-nation currency area.

A government official said that Athens had asked for an extension to its Master Financial Assistance Facility Agreement with the euro zone. However, he insisted the government was proposing different terms from its current bailout obligations.

Greece had committed to maintain fiscal balance during the interim period, take immediate reforms to fight tax evasion and corruption, and measures to deal with what Athens calls its “humanitarian crisis” and kick-start economic growth, he said.

Greece further pledged to meet its financial obligations to all creditors, recognise the existing EU/IMF programme as the legally binding framework and refrain from unilateral action that would undermine the fiscal targets.

Crucially, it accepted that the extension would be monitored by the European Commission, European Central Bank and IMF, a climbdown by Tsipras who had vowed to end cooperation with “troika” inspectors accused of inflicting deep economic and social damage on Greece.

The six-month interim period would be used to negotiate a long-term deal for recovery and growth incorporating further debt relief measures promised by the Eurogroup in 2012.

Euro zone partners have so far said Athens must comply with the terms of the current bailout, which require it to run a 3 percent primary budget surplus this year, before debt service payments.

Senior euro zone officials were due to hold a teleconference yesterday to discuss the Greek application.

The wording chosen could help satisfy at least some of the concerns that have held up agreement over the past two weeks, allowing Athens to avoid saying it is extending the current programme that it opposes while creditors can avoid accepting a “loan agreement” without strings attached.

Crucial details remain to be clarified on the fiscal targets, labour market reforms, privatisations and other measures due to be implemented under the existing programme.

Government spokesman Gabriel Sakel-