Tsipras Faces Thursday Deadline to Submit Official Proposal for Tackling Greece's Debt

Jul 09, 2015 09:07 AM EDT

(Photo : Getty Images/Michele Tantussi) Mr. Tsipras seems acutely aware of the economic and financial hardship that his country is facing. He sent a written communication to the European Stability Mechanism (ESM) asking for additional loans in return for complying with the previous agreement raising taxes and reducing pensions.

Greek leader Alexis Tsipras is facing a Thursday deadline to present a satisfactory plan that will appease his country's creditors. Failure to do so means no more additional loans and a likely "Grexit" scenario.

The BBC reported that if the Greek government is able to meet the deadline, the proposal will be scrutinized by the European financial officials on July 11. EU heads of states will then review the plan during their July 12 summit.

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Banks in Greece are yet to open this week and are unlikely to do so for the rest of the week. Greeks are only able to withdraw up to 60 Euros from the bank's ATM. The breakdown in the debt talks and surprise referendum announcement pushed the Eurozone officials to withhold further emergency funding.

Greek bank officials have assured the country's depositors that they have enough funds to last until July 13.

The Greek government sent a written communication to the European Stability Mechanism (ESM) asking for additional loans in return for complying with the previous agreement raising taxes and reducing pensions, according to the Independent.

The letter explained that the new loan will be used to pay the country's current obligation and to keep its banks from becoming insolvent.

A number of EU officials reacted positively to the Greek government's recent overtures. Pierre Moscovici, an EU commissioner, believes that Greece is now willing to have a meaningful talk with its creditors.

The International Monetary Fund (IMF) has announced that some of Greece's debt would need to condone or restructured. IMF Director Christine Lagarde said that a deal must be struck as soon as possible.

Greece's total debt stands at around 320 billion Euros, according to the Seattle Times. The government is currently in default after failing to make its scheduled payment of 1.5 billion Euros to the International Monetary Fund (IMF) on June 30. Another payment is due on July 20, but this time to the European Central Bank (ECB). Considering the current financial status of Greece, the ECB is not holding its breath.

TagsGreece debt crisis, Greece debt restructuring, Greek banks, Grexit, Eurozone, European Stability Mechanism, EU, European Union, euro