Eurozone to Give Verdict on Greece’s Last-Chance Debt Plan

Local Editor

Eurozone finance ministers on Saturday were to give their verdict on Greece's last-chance bid for a third bailout to keep its ship-wrecked economy afloat and prevent its exit from the single European currency.

But an EU leader and two other sources gave no more than a 50-50 chance that a make-or-break European summit on Sunday would approve a deal.

Hardliners Germany and the Baltic states are exasperated with Greece's hard-left government, blaming it for more than five months of bitter negotiations in which trust has been the biggest casualty.

Finance ministers from the 19-country Eurozone will meet in Brussels Saturday to review Greece's proposals for market-oriented reforms in exchange for its third bailout since 2010.

The package, submitted by Greek Prime Minister Alexis Tsipras, was approved by parliament in Athens after midnight Friday. It was backed by 251 out of 300 deputies.

It includes plans for a pensions overhaul, tax hikes and privatizations.

The terms are similar to those previously offered by creditors which had been angrily dismissed by Tsipras as humiliating for Greece and then rejected by voters in a snap referendum.

The package is coupled to a request for a three-year funding plan and a separate 35-billion-euro [$39.04-billion] investment package.

The leftist premier told parliament: "We have a national duty to keep our people alive... we will succeed not only in staying in Europe but in living as equal peers with dignity and pride."

He admitted "the loan deal ...entails many proposals that are far from our pledges," but said it was the best deal available.

It was "marginally better" than proposals put forward by the creditors last month which did not offer relief from Greece's 320-billion-euro mountain of debt, said Tsipras.

The Greek government hoped the vote would give it an emphatic mandate to continue the talks with the creditors. But it also revealed the depth of opposition to fresh austerity.

Further, three senior government figures were among 10 deputies who abstained or voted against and several others from the ruling Syriza party stayed away, prompting commentators to wager the result could force a government shake-up.

An EU source in Brussels said Athens' latest proposals were "positive" enough to form the basis of a new support package.

But Athens's biggest creditor, Berlin, which had opposed parallel appeals for debt relief, remained tight-lipped.

President Dalia Grybauskaite of Lithuania, which joined the euro only six months ago, on Friday put the chances of a deal by Sunday's summit at 50-50, saying Athens' proposals are based on "outdated information" and "will have to be seriously corrected."

Moreover, EU sources who asked not to be named also put the probability at no more 50-50.

Despite the odds, French President Francois Hollande called the Greek proposals "serious and credible" while cautioning that "nothing is decided yet".

Italian Prime Minister Matteo Renzi declared himself "more optimistic" that a deal would be done.

The EU's bailout fund, the European Stability Mechanism, was ready to consider putting up 58 billion euros, plus 16 billion euros from the International Monetary Fund [IMF], an EU source said. But Germany said the outcome of this weekend's crisis talks was "completely open".

Berlin leads a bloc of hardline Eurozone nations saying that, after two bailouts over the past five years totaling 240 billion euros, and 107 billion euros in debt forgiveness in 2012, Greece is looking like a bottomless money pit.

Although Greek voters last Sunday roundly voted "No" to accepting tough austerity terms for a bailout that expired June 30, they are alarmed at capital controls that have closed banks and rationed cash at ATMs.

European Council President Donald Tusk said the summit he will host in Brussels Sunday is a "last chance" for Greece and the EU to seal a deal.

Source: News Agencies, Edited by website team