July 8 (Reuters) - Greece on Thursday submitted a formal request for a three-year loan from the European rescue fund, the European Stability Mechanism (ESM).
Below is the letter sent by the country’s finance minister Euclid Tsakalotos to the head of the ESM:
“8 July 2015
Dear Chairperson and Managing Director,
On behalf of the Hellenic Republic (“the Republic” or “Greece”), I hereby present a request for stability support within the meaning of Articles 12 and 16 of the ESM Treaty given the risk to the financial stability of Greece as a member state and of the euro area as a whole.
Specifically, Greece seeks from the ESM a loan facility (“Loan” or “Programme”) with an availability period for three years in accordance with the conditions provided in Article 13 of the ESM Treaty and in Article 2 in the Guideline of Loans. The Loan will be used to meet Greece’s debt obligations and to ensure stability of the financial system.
Consistent with the principles of this medium to long term Programme, the Republic is committed to a comprehensive set of reforms and measures to be implemented in the areas of fiscal sustainability, financial stability, and long-term economic growth. Within the framework of the Programme, we propose to immediately implement a set of measures as early as the beginning of next week including:
Tax reform related measures
Pension related measures
We will also include additional actions that the Republic will undertake to further strengthen and modernize its economy. The Greek government will on Thursday 9 July at the latest set out in detail its proposals for a comprehensive and specific reform agenda for assessment by the three Institutions to be presented to the Euro Group.
In addition to the above, it is the expressed goal by the Greek government that by the end of the availability period of the Loan or earlier, it regains full and affordable market financing to meet its future funding requirements as well as sustainable economic and financial situation. As part of broader discussions to be held, Greece welcomes an opportunity to explore potential measures to be taken so that its official sector related debt becomes both sustainable and viable over the long term.
Greece is committed to honor its financial obligations to all of its creditors in a full and timely manner. We trust Member States appreciate the urgency of our Loan request at this time given the fragility of our banking system, our shortage of available liquidity, our upcoming obligations, our buildup of internal arrears, and our expressed desire to clear our outstanding arrears with the IMF and the Bank of Greece.
We reiterate the Greece’s commitment to remain a member of the Eurozone and to respect the rules and regulations as a member state. We look forward to your favorable and timely consideration of our request.
For avoidance of doubt, this letter supersedes our previous request letter dated 30 June 2015.
Minister of Finance” (Reporting by Athens bureau; Editing by Ruth Pitchford)