Possible debt deal for Greece spurs new hope
Country offers better reforms
BRUSSELS — Greece has finally offered economic reforms that creditors consider potentially acceptable, giving Prime Minister Alexis Tsipras a couple of days to turn a spirit of goodwill into a deal that might keep the country from a painful exit from the euro currency.
Even though a firm deal to get Greece more loans remained elusive Monday, leaders from the 19 euro nations and the International Monetary Fund said Tsipras’ new plan offered the basis to break a four-month deadlock in talks.
Uncertainty over Greece has sapped confidence in global markets, particularly in Europe, and threatened the financial future of Greeks.
“I want to end this political gambling,” European Union President Donald Tusk said at an emergency summit on the issue.
Greece is offering about $9 billion in higher taxes and austerity measures over the next two years, a Greek government official said on condition of anonymity because the measures had not been officially announced.
Financial officials gave a tentative endorsement to Greece’s proposals for spending cuts and reforms they would make in exchange for billions of euros in fresh loans. Greece needs the money urgently, as it faces a June 30 debt repayment it cannot afford.
Tusk said Greece’s plans, which include retirement reform and sales tax changes, “were the first real proposals in many weeks.”
“It’s an opportunity to get that deal this week,” said Jeroen Dijsselbloem, the Dutchman who chaired an emergency meeting of eurozone finance ministers ahead of the summit.
Leaders are now looking at a two-day European Union summit starting on Thursday in Brussels to reach a deal that will keep Greece solvent.
The more cooperative spirit gave a boost to stock markets. Athens shares closed 9 percent higher. The Stoxx 50 index of top European shares closed up 4.1 percent.
The proposals will impose new taxes on businesses and the wealthy but no further cuts in pensions or public sector salaries, a “red line” for the left-wing government.
Athens will make tougher rules on early retirement and shift some categories of goods to a higher sales tax bracket, including hotels and certain foods. Emergency bailout taxes that had been imposed will remain, even though Tsipras had pledged to phase them out.
The official said that employers will have to contribute higher social security contributions to pension and unemployment funds.