Greek crisis: by Saturday, we'll know where Greece is going

Yesterday, the Greek government wrote a formal request to the European Stability Mechanism’s (ESM) €500bn bailout facility asking for a three-year loan. By tonight, Prime Minister Alexis Tsipras has to fulfil a commitment he made to set out and deliver to creditors detailed proposals for a "comprehensive and specific" reform agenda.

These proposals will have to go considerably further than those submitted two weeks ago before talks broke up in acrimony. If serious, they will make a mockery of the OXI vote in the referendum. What Greece is after now is not the €7.2bn tranche of an expiring agreement, but a lengthy arrangement entailing at least €30bn, possibly more. And from a worse economic position than when it took office, and in which it has been complicit.

Jeroen Dijsselbloem, Chair of the ESM Board of Governors (all 19 eurozone finance ministers) then wrote, as he is bound, to the European Commission and ECB (Pierre Moscovici and Mario Draghi) to say that the request will be considered in the light of possible financial stability risks to the eurozone, Greece’s debt sustainability (with IMF input), and possible financing needs.

What happens next is that if the Commission and ECB evaluation on Friday is positive, it will go before all eurozone governments. If there is a deal to be done, the ESM Board of Governors would be expected to approve it on Saturday. At that point, the Commission and the ECB (possibly the IMF) will draft a memorandum of understanding, or conditional loan agreement, which Syriza has previously railed against as a form of economic asphyxiation.

Syriza will have to swallow hard on this last offer from creditors. If the mood has been a little more conciliatory all round so far, Zoe Konstantopoulou, President of the Greek Parliament, reminded us that tensions are undiminished. Writing to the President of the European Parliament yesterday, she advised him, among other things, that Greece’s Truth Committee on Public Debt (an audit conducted by a group of some 30 experts from civil society, half of whom are Greek and half of whom are foreign) had issued a preliminary report that found Greek debt to be "illegitmate, illegal, odious and unsustainable." Alexis Tsipras will unquestionably ask again for debt relief. Angela Merkel still thinks that this runs counter to the European Treaties as they stand, and her deputy, Sigmar Gabriel, head of the SPD—who had previously welcomed Syriza’s election victory—is no less and perhaps now more hawkish. It may be possible, subject to as yet unspecified legal and approval processes, to dangle the carrot of future debt relief, conditional upon "good behaviour" and the successful implementation of reforms. At present, it looks unlikely, in spite of IMF and US pressure.

By Saturday, we will know if the unprecedented double eurozone and EU summits called for Sunday will be merely to rubber-stamp a deal, or to get everyone focused on the first exit of a country from the euro. And, in particular, on the provision of humanitarian relief and other support for Greece as an EU member as the process unfolds.