Greeks race to finalise reforms for euro bailout

THE Greek government was last night racing to finalise a plan of reforms for its third bailout, hoping that this time the proposal will meet with approval from its European partners and stave off a potentially catastrophic exit from the euro.

A protester outside the Greek parliament in Athens during a pro-European demonstration yesterday. Picture: Getty

Prime minister Alexis Tsipras was meeting finance ministry officials a day after the government requested a new three-year aid programme from Europe’s bailout funds and promised to immediately enact reforms, including to taxes and pensions, in return.

Details of Greece’s reforms had to be submitted last night to give time for creditors to review them ahead of a summit of the European Union’s 28 members set for Sunday.

Yesterday was “a decisive day” for Europe, EU economics commissioner Pierre Moscovici said, adding he was hopeful a new Greek bailout deal was possible, in exchange for “concrete, complete” reform proposals.

Mr Moscovici said: “I have the sense that the dialogue is established, or restored, and that there is a way out.”

Failure to reach a deal could be the first step towards Greece leaving the shared euro currency. The last-minute negotiations come amid bank closures in Greece, where capital controls have been imposed that restrict Greeks to cash withdrawals of €60 (£43) per day.

The closures have been extended until Monday.

Pensioners without bank cards have been particularly hard hit as they have struggled to access accounts. Certain bank branches opened last week to allow them to withdraw a weekly allowance of €120 each.

The government announced on Wednesday that this was being renewed so they could withdraw the same sum. Hundreds of elderly Greeks lined up outside banks yesterday 
morning.

Hopes for a deal rose after Donald Tusk, who chairs the EU summits, said that Greece’s plan would have to be matched by creditors’ suggestions on how to make the country’s debt manageable in the longer term.

“The realistic proposal from Greece will have to be matched by an equally realistic proposal on debt sustainability from the creditors. Only then will we have a win-win situation,” Mr Tusk said.

Easing the terms of Greece’s existing bailout loans has been a key dividing issue in the bailout talks for months – with Greece and the International Monetary Fund pressing in favour, and key European states like Germany resisting the idea.

Mr Tusk’s comments boosted confidence that the sides will be able to find a compromise. The Stoxx 50 index of top European shares jumped 2.6 per cent.

Greece’s financial institutions have been kept afloat so far by emergency liquidity assistance from the European Central Bank. But the ECB has not increased the amount in days.

German ECB governing council member Jens Weidmann argued that Greek banks should not get more emergency credit from the central bank unless a bailout deal is struck.