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Two hours before the midnight deadline Greece’s new bailout proposals that will decide whether it stays or leaves the eurozone landed in Brussels.
There appears to have been considerable movement, and Alexis Tsipras faces strong internal opposition, but the plan includes tax increases, pension changes, privatisation and spending cuts in return for a fresh deal, according to overnight leaks. Many of the proposals in the original creditor plan appear to have been stomached.
They will be pored over today by officials, discussed by finance ministers tomorrow, and go to the deciding emergency European Council summit in Brussels on Sunday. Asian markets have risen overnight on hopes of a deal. The Greek parliament will debate it today.
In The Times Bruno Waterfield says the package involved complex political negotiations that could bring down Tsipras.
But there was hope, as Athens appeared to accept that austerity measures were inevitable in return for loans to save the country from bankruptcy and expulsion from the euro.
Greek opposition politicians held secret talks in Brussels as the Greek government prepared to pass controversial legislation on pension cuts and tax increases.
Diplomatic sources told The Times that Tsipras appeared ready to pass measures without the support of his government coalition partners, the nationalist Independent Greeks, or left-wingers in his own Syriza party.
In its early morning live website coverage The Telegraph carried leaks of documents surfacing in Athens and suggested it looked like a “much harsher” deal for Greece - but in return for a new three year bailout deal and a restructuring of debt. Greece seems to have given a lot, but is asking for more than was on offer two weeks ago.
The documents suggested that VAT exemptions for Greek islands would be abolished, restaurants would be hit by the highest VAT rate, farmers would have fuel subsidies abolished and there are fallback proposals for rises in income tax and pensions.
The Telegraph also reports that Germany was at last bowing to pressure as a chorus of countries and key institutions demand debt relief for Greece, a shift that could break the five-month stalemate.In a highly significant move, the European Council has called on both sides to make major concessions.
In the words of The Guardian, the Greek government capitulated to demands from its creditors for severe austerity measures in return for a modest debt write-off, raising hopes that a rescue deal could be signed.
Athens has put forward a 13-page document detailing reforms and public spending cuts worth €13bn with the aim of securing a third bailout from creditors that would raise €53.5bn and allow it to stay inside the currency union.
The Mail reports that the package met longstanding demands by creditors to impose wide-ranging sales-tax increases and cuts in state spending for pensions that the left-leaning Greek government had long resisted.
According to the FT Greek lenders face bankruptcy on Monday if the country fails to strike a deal with creditors over the weekend, according to senior bank executives.
The FT said the reform plan was approved by Tsipras’s cabinet just hours before the deadline but not before some far-left members of his governing Syriza party raised objections that the plan crossed “red lines”. Greek media reported that Tsipras told his cabinet: “We are ready to compromise.”
It will be a long weekend, in Brussels and in Athens, but at least there are new plans on the table. Whether they are tougher than the package already rejected by the Greek people last Sunday will be seen over the new few hours.
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