A last-minute letter by Greek PM Alexis Tsipras to Eurogroup head Jeroen Dijsselbloem to request a bailout extension reportedly states that “the loan will be exclusively used to pay Greece’s debt, either externally or internally.”
The key points in the resurrected negotiation, via correspondence, is Athens’ request for a two-year deal to cover its funding needs with a simultaneous debt restructuring via the ESM.
Moreover, the radical leftist government appears intent to proceed with a referendum on Sunday.

The level of borrowing in the latest Greek plan reaches 29.14 bln euros until 2017.

Nevertheless, for the request to be approved, a MoU is necessary, in other words, a new “memorandum” — i.e. loan conditions.

The is what the ESM’s regulations state:

3. If a decision is adopted pursuant to paragraph 2, the Board of Governors shall, in accordance with Article 13(3) of the ESM Treaty, entrust:

(a) The European Commission – in liaison with the ECB and, wherever possible, together with the IMF – with the task of negotiating, with the ESM Member concerned, a memorandum of understanding (an “MoU”) detailing the policy conditions attached to the loan. The content of the MoU shall reflect the severity of the weaknesses to be addressed and the fact that the financial instrument chosen is a loan. It shall include the details of the macroeconomic adjustment programme that shall specify the policy conditions to be applied to the support and implemented in the beneficiary ESM Member. Where bank recapitalisation is conducted using a portion of the loan, the provisions applicable therein should be in keeping with the monitoring, general principles of State-aid and involvement of the ESAs, as laid out in the Guideline on Financial Assistance for the Recapitalisation of Financial Institutions.

(b) The Managing Director of the ESM, with the task of preparing a proposal for a financial assistance facility agreement (FFA), including the financial terms and conditions of the loan, to be adopted by the Board of Governors.

With the request, the Tsipras government essentially wants to remove the IMF as one of its institutional creditors.

Athens also wants a brief extension of the current bailout plan (which ends on Tuesday at midnight) in order to transition into the new regime.

Details out of Athens’ Maximos Mansion government house remain sketchy, with only the “non paper” form of communication reminding that Greece remains at the negotiating table.