Greek Debt Crisis: Government Requests Eurozone Loan Extension Ahead Of Deadline To Avoid Bankruptcy

Greece has formally requested a six-month extension for its loan agreement with the Eurozone. The ask comes a little more than a week before its bailout program is due to expire. The Greek government’s request was met with strong opposition from Germany, but the deal could save the country from possible bankruptcy and an exit from the 19-member Eueropean Union.

A government official told Reuters that Athens had asked for an extension to its "Master Financial Assistance Facility Agreement" with the Eurozone, which was set to expire at the end of February. He said that Greece had committed to maintain fiscal balance, reform policies to fight tax evasion and to address what Greek Prime Minister Alexis Tsipras had called a “humanitarian crisis” brought about by its austerity measures.

Eurozone finance ministers will meet in Brussels on Friday to discuss the request. If the extension is approved, the six-month period would also be used to negotiate a deal with Eurozone partners for long-term recovery and incorporating debt-relief measures promised by the group in 2012.

The extension would be monitored by the European Commission, European Central Bank and International Monetary Fund, wresting power from Tsipras, who had rejected the help of these auditors he had called the “troika.” Greece had previously indicated it had no intention of cooperating with the troika of the EU, and the request for an extension could be seen as Tsipras’ concession to the country’s economic burdens and obligations.

The troika had agreed to launch a 110 billion euro ($125 billion) bailout loan to Greece in May 2010, and another 130 billion euro ($148 billion) was loaned in February 2012. Lenders had imposed strict austerity measures on the country since then, and Greece was expected to run a 3 percent budget surplus this year before debt payments as part of its loan terms.

German Finance Minister Wolfgang Schaeuble expressed doubt on Monday that Athens could push ahead a request for a funding extension without promising to cut spending. Tsipras responded Tuesday during a speech saying that Schaeuble had "lost his cool."

"Not because he spoke up against the Greek government, because that is his right, but he spoke condescendingly towards the Greek people," Tsipras said, according to Reuters. "I want to say that it would be better for him to pity people who walk with their heads bowed ... not to pity people who hold their heads up high with pride."

Tsipras promised to ditch the austerity measures imposed by the lenders when he was elected in January.