Greek leader Tsipras to sell last-ditch austerity deal proposal to reluctant party

Greek Prime Minister Alexis Tsipras sought his left-wing party’s backing on Friday for a new budget austerity package that is harsher than what he urged Greeks to reject in a vote just last week, but would provide the country will longer-term financial support.

ATHENS, Greece — Greek Prime Minister Alexis Tsipras sought his left-wing party’s backing on Friday for a new budget austerity package that is harsher than what he urged Greeks to reject in a vote just last week, but would provide the country will longer-term financial support.

Government ministers signed off on the sweeping new measures, which include pension cuts and tax increases that are likely to inflict further pain on a people that have just emerged from a six-year economic depression.

If approved, Greece would in return get a three-year package of loans worth nearly $60 billion as well as some form of debt relief. The package would be far larger than the 7.2 billion euros creditors had been offering to Greece during the previous five months of fruitless negotiations.

Greece’s latest proposal was sent to rescue creditors who will meet this weekend to decide whether to approve them. The new package of loans would be Greece’s third bailout program since it lost access to financing from bond markets in 2010.

In an unusual move, Tsipras is first seeking authorization from parliament to negotiate with the creditors based on the proposal in a vote Friday. He is essentially asking his Syriza party to sign off on measures that to many feel like a U-turn since more than 60 per cent of voters opposed more austerity in last Sunday’s referendum.

Tsipras convened his party’s lawmakers for closed-door discussions Friday morning before the parliamentary debate. The proposal was being debated at committee level Friday afternoon, and it was unclear when the full assembly debate would start. Votes are usually held at midnight, but they can go later.

The coalition government has 162 seats in the 300-member parliament and pledged backing on a deal from a large section of opposition lawmakers. But failure to deliver votes from his own government could topple Tsipras’ coalition.

The proposals are to be discussed by eurozone finance ministers on Saturday, ahead of a summit of the European Union’s 28 leaders Sunday.

Though German officials would not be drawn on the merits of the Greek proposals, French President Francois Hollande said they are “serious and credible.” France’s Socialist government has been among Greece’s few allies in the eurozone during the past months of tough negotiations.

Jeroen Dijsselbloem, who chairs eurozone finance ministers’ meetings, said the proposals were “extensive” but would not say whether he considered them sufficient.

On Friday, Dijsselbloem will hold a conference call with the leaders of other key creditors, the EU’s executive Commission, the European Central Bank and the International Monetary Fund.

They are then expected to send their assessment of the proposal to the eurozone finance ministers later Friday.

As the government inched closer to a deal to ensure Greece doesn’t crash out of Europe’s joint currency, some Greeks were furious at the deep spending cuts in the proposals.

“If this is Europe, then we don’t want this Europe,” said Aristidis Dimoupulos, a marketing professor in Athens. “If this is the eurozone, we don’t care if we go out or in. If in this life we’ll be slaves, it’s better to be dead.”

Others adopted a ’wait and see’ approach.

“I don’t know. The chances are fifty-fifty” for a deal, said Athens resident Omiros Fotiadis.

Meanwhile, in Greece, banks remained shut since the start of last week and cash withdrawals were restricted to 60 euros ($67) per day. Although credit and debit cards work freely within the country, many businesses are refusing to accept them and insisting on cash-only payments. All money transfers abroad, including bill payments, require special permission.

Alternate Finance Minister Dimitris Mardas said the banks would be gradually restored to operation. They are currently due to remain closed through Monday, at which time he said a new order would be issued expanding what transactions can be carried out. Experts say it is unlikely that, even in the event of a deal, the limits on cash withdrawals and transfers will be lifted completely for some time.

Rallies backing and opposing the government were planned in central Athens for Friday evening.

Syriza had resisted a new loans-for-austerity deal, arguing the country is too weak to endure it, with a quarter of the labour force out of work and a growing number living in poverty. But it was forced to resume talks with the creditors as the Greek banks faced the prospect of collapse within days if the country did not receive a new rescue package.

Athens finally issued its proposals late Thursday.

In return for the new package, the government said it would seek debt relief — a notion gaining ground internationally despite reluctance in Germany.

“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,” European Council President Donald Tusk said.

On Thursday, German Finance Minister Wolfgang Schaeuble also said the possibility of some kind of debt relief would be discussed over coming days.

But in a note of caution, he added: “The room for manoeuvr through debt re-profiling or restructuring is very small.”

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