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[ATHENS] Greek Prime Minister Alexis Tsipras will on Friday ask lawmakers to endorse his new plans to save the country from financial collapse, as eurozone officials pore over the latest bailout package ahead of crunch weekend talks.
The last-ditch package, submitted two hours before a midnight Thursday deadline, offers a pensions overhaul and tax hikes in return for debt relief and a rescue loan from the eurozone similar to a proposal put forward by Greece's international paymasters before talks broke down last month.
But there was no immediate word whether Greece's paymasters would accept the new plan, which agrees to their demands to raise the age of retirement, reform taxes and speed up privatisation, but limits changes in other thorny issues, including tax breaks for Greece's islands and cuts to military spending.
"The Greek proposal... includes funding of the country's financing needs... for three years, debt adjustment and a front-loaded investment package of 35 billion euros (S$52.4 billion)," a Greek government source said.
Eurozone officials will now study the details of the plan before a make-or-break summit of all 28 European Union leaders on Sunday that could determine Greece's future in the single currency and even the bloc as a whole.
The summit comes a week after Greeks overwhelmingly voted to reject a fresh bailout package offered by the country's creditor institutions - the European Commission, the European Central Bank and the International Monetary Fund - in return for new tax rises and spending cuts.
The crescendo of Greece's long-running debt crisis forced the country's banks to close last month, bringing the economy to a standstill, while a ban on transferring money out of the country has isolated Greece from foreign suppliers of everything from food to medicine.
The Greek parliament will be asked on Friday to authorise Tsipras and other senior officials to hold new talks on the basis of this latest bailout offer, state news agency ANA said.
While the premier has hailed the referendum as giving him a public mandate to lead new talks, he could face a challenge from hardliners in his Syriza party who reject any austerity no matter the cost.
Under the new proposals, Greece's leftist government - which swept to power in January promising to end years of painful austerity demanded under previous bailouts - would agree to discourage early retirement and seek higher health contributions from pensioners.
Tax on shipping, corporate tax and a luxury tax would be increased and a crackdown would be energetically pursued against tax evasion, according to a 13-page document released by Athens in the early hours of Friday.
In it, Greece also pledged to raise sales tax revenue by the equivalent of 1.0 per cent of gross domestic product (GDP), sell the state's remaining shares in telecoms giant OTE and commit to privatising the ports of Piraeus and Thessaloniki no later than October.
But Athens also warned the primary surplus targets it had already agreed with its debtors - one per cent of GDP this year, followed by 2.0 per cent in 2016 and 3.0 per cent in 2017 - would have to be revised because of worsening economic conditions.
Instead of abolishing a 30 percent tax break on all its islands, as requested by its creditors, the government said for now it will only scrap the measure on the wealthiest islands and those most popular with tourists.
And, whereas the creditors had demanded a 400-million-euro reduction in military spending, Athens is offering to cut 100 million this year and 200 million in 2016.
GREEKS WANT THE EURO
Greece faces has an uphill battle to convince most of the eurozone nations to agree to its third bailout in five years.
Germany, the Netherlands and several Nordic and eastern European states are hostile to another rescue package and want to see Greece stick to reforms it has rejected, on taxes and pensions, before it talks of debt relief.
"I have said that a classic 'haircut' is out of the question for me and that hasn't changed between the day before yesterday and today," German Chancellor Angela Merkel told reporters on a visit to Sarajevo on Thursday.
The same day, however, German Finance Minister Wolfgang Schaeuble conceded that IMF chief Christine Lagarde was correct when she said Greece was in need of some debt restructuring.
But he was quick to add: "There cannot be a haircut because it would infringe on the system of the European Union and after all the European Union is a community of common laws."
On the streets, ordinary Greeks were panicking over the realisation that, by voting to reject austerity in last Sunday's vote, they brought their country to the brink of a messy exit from the euro, a so-called "Grexit".
"I voted 'No' but I am for Greece staying in the eurozone," said Viviane, a worried 46-year-old secretary in an Athens lawyer's office, echoing a view held by many.
"I want an agreement and no matter if it contains austerity measures - that is still better than going back to the drachma," sighed Stefanos, an unemployed 32-year-old.
It has already received 240 billion euros in loans from the two previous EU-IMF rescues, the last of which expired on June 30. In 2012, creditors also forgave 107 billion euros of its debt.
But all that has proved insufficient, with Greece struggling through a depression that has shrunk its output by a quarter and sent unemployment rocketing to 26 per cent.
Read more on the Greek crisis here