Greece sends reform plan to EU, sets parliament vote

Thu Jul 9, 2015 5:18pm EDT
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By Renee Maltezou and John O'Donnell

ATHENS/FRANKFURT (Reuters) - The Greek government sent a package of reform proposals to its euro zone creditors on Thursday in a race to win new funds to avert bankruptcy and will seek a parliamentary vote on Friday to endorse immediate actions.

The chairman of Eurogroup finance ministers, Jeroen Dijsselbloem, confirmed receiving the documents and said through a spokesman that he would not comment until they had been assessed by experts from the European Commission, European Central Bank and International Monetary Fund.

A Greek official said lawmakers would be asked to authorize the leftist government to negotiate a list of "prior actions" it would take before any fresh aid funds are disbursed, a key step to convince skeptical lenders of its serious intent.

Leftist Prime Minister Alexis Tsipras spent the day with his cabinet drafting a last-ditch package of tax rises, pension reforms and economic liberalization measures on which Greece's survival in the euro zone hinges.

A further vote would be needed to turn them into law next week if euro zone leaders agree at a summit on Sunday that the proposals are a basis for starting negotiations on a three-year loan and releasing some bridging funds to keep Greece afloat.

Greek banks have been closed since June 29, when capital controls were imposed and cash withdrawals rationed after the collapse of previous bailout talks. Greece defaulted on an IMF loan repayment the following day and now faces a critical July 20 bond redemption to the ECB, which it cannot make without aid.

The country has had two bailouts worth 240 billion euros from the euro zone and the International Monetary Fund since 2010, but its economy has shrunk by a quarter, unemployment is more than 25 percent and one in two young people is out of work.

Germany, Athens biggest creditor, meanwhile made a small concession by acknowledging that Greece will need some debt restructuring as part of the new program to make its public finances viable in the medium-term.   Continued...

A pro-Euro protester holds a European Union and a Greek national flag during a rally in front of the parliament building in Athens, Greece, July 9, 2015.  REUTERS/Alkis Konstantinidis