Eurozone leaders have broadly welcomed new proposals for Greek reforms amid hopes a deal can be struck within days to stop Greece defaulting on its debt.
German Chancellor Angela Merkel said Greece’s latest offer constituted “some progress”. But she said more work was needed and “time is short”.
Greece must repay €1.6bn (£1.1bn) to the International Monetary Fund (IMF) by the end of the month.
If it fails to do so, it risks crashing out of the euro and possibly the EU.
Although no deal has been struck, key obstacles appear to have been cleared, the BBC’s Damian Grammaticas reports from Brussels.
The deal being formed is believed to include: New taxes on businesses and the wealthy Selective increases in VAT Savings in pensions linked to curbing early retirement and increasing pension contributions No further reductions in pensions or public-sector wages – “red lines” for Greece’s Syriza government The move was received with cautious optimism by leaders of 18 other eurozone nations gathered for an emergency summit in Brussels.
There is a script which seemingly all eurozone leaders are urged to learn, which is that if the currency union is in the grips of crisis, no solution can or should be found till markets and economy are on the verge of a heart attack.
With almost no time left before a de facto default – and, more frighteningly perhaps, with a Greek banking system on the brink of total collapse because savers had lost all confidence that a rescue for their state could be found – Mr Tsipras has come up with a plan that his fellow eurozone leaders see, at last, as the basis for a deal.
So subject to technical talks, an actual deal to release life-saving additional loans for Greece may be reached at the end of the week.
The European Central Bank (ECB) approved additional emergency funding for Greek banks to cover withdrawals, allowing banks to stay open and providing breathing space for a deal to be reached.
It has acted repeatedly after anxious savers withdrew more than €4bn in recent days.
The Greek banking system is on the verge of collapse due to savers’ loss of confidence.
Eurozone finance ministers meet again on Wednesday. They hope to approve a package to be put to eurozone leaders for final endorsement on Thursday morning.
Even if eurozone finance ministers and the European Council agree to a deal, it still needs to be approved by the Greek parliament and eurozone governments by next Tuesday.
Source-BBC
