(CN) – Greece has until Thursday to come up with a plan that will satisfy EU lenders and stave off the growing likelihood of financial collapse, EU Council president Donald Tusk said late Tuesday.
After Greek voters overwhelmingly rejected the austerity terms of another bailout from the European Union this past weekend, EU leaders held a summit on Tuesday to weigh both Greece’s future in the euro zone and the imminent collapse of the nation’s banking system.
At the summit, Greek prime minister Alexis Tsipras said he planned to renew his country’s request for another EU bailout – a request that must be accompanied by “a comprehensive and specific reform agenda” from the Greek government by no later than July 9.
The proposal will then be assessed by EU regulators, the European Central Bank and the International Monetary Fund before leaders from all 28 EU nations meet to discuss the plan on July 12.
In the past, the sticking point has been the IMF’s austerity demands. The previous bailout – which expired on June 30 – demanded five years of deep cuts that have left the Hellenic Republic’s economy in shambles, a 25 percent unemployment rate and more than 50 percent unemployment for Greek young people.
Greece missed a 1.6 billion euro debt payment to the IMF this past week, and will likely miss a 3.5 billion euro payment due on July 20 without some sort of bridge agreement.
Tusk pulled no punches in laying the blame at the feet of all parties involved, including the ECB, the IMF and the biggest stakeholders in Greece’s debt – Germany and the Netherlands.
“All sides of the negotiations share the responsibility for the current status quo,” Tusk said in a statement. “Our inability to find agreement may lead to the bankruptcy of Greece and the insolvency of its banking system. And for sure, it will be most painful for the Greek people. I have no doubt that this will affect all Europe also in the geopolitical sense. If someone has any illusion that it will not be so, they are naive.”
He added, “The stark reality is that we have only five days left to find the ultimate agreement. Until now, I have avoided talking about deadlines. But tonight I have to say loud and clear that the final deadline ends this week. All of us are responsible for the crisis and all of us have a responsibility to resolve it.”
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