Greece’s Government was racing Thursday to finalise a plan of reforms for its third bailout, hoping this time to get its European partners’ approval and to stave off a looming, potentially catastrophic exit from Europe’s joint currency, the euro.
Details of Greece’s reforms are to be submitted Thursday to give creditors time to review them ahead of a summit of the European Union’s 28 memberson Sunday.
Hopes for a deal rose after Donald Tusk, who chairs the EU summits, said Greece’s plan would have to be accompanied 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,” 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 favor and key European states like Germany resisting the idea.
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 percent.
Prime Minister Alexis Tsipras met with finance ministry officials and was holding a cabinet meeting Thursday afternoon to finalize his country’s plan, a day after his government requested a new three-year aid program from Europe’s bailout fund and promised to immediately enact reforms, including to taxes and pensions, in return.
The last-minute negotiations come as Greece’s financial system teeters on the brink of collapse. It has since June 29 put limited cash withdrawals to 60 euros ($67) per day to stanch a bank run. The banks and the stock market have been shut for just as long.
The closures, which have been extended through Monday, have led to daily lines at ATM machines and have hammered businesses. Payments abroad have been banned without special permission.
“Can you see anybody in the shopIJ Nobody’s coming in, because everyone’s living off a drip,” said Magda Petridi, a fortune teller who runs a shop selling good luck charms, aromatic oils and trinkets. “Until a month ago business was going
pretty well.”