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Greece's creditors draft deal to unlock aid

Greek Prime Minister Alexis Tsipras (centre) gestures as he is escorted by Minister for Culture, Education and Religious Affairs Aristides Baltas (second left), Deputy Minister for Culture, Education and Religious Affairs Stavros Kontonis (right) and government spokesman Gabriel Sakellaridis (rear, second right) during his visit at the ministry in Athens on June 2, 2015.

[BRUSSELS] Greece's creditors on Tuesday drafted the broad lines of an agreement to put to the leftist government in Athens in a bid to conclude four months of acrimonious negotiations and release aid before the cash-strapped country runs out of money.

The joint effort by the European Commission, the European Central Bank and the International Monetary Fund to set out the terms for a cash-for-reforms deal came after the leaders of Germany and France held emergency talks with those institutions in Berlin on Monday night to press the lenders to bridge their own differences and find a solution. "It covers all key policy areas and reflects the discussions of recent weeks. It will be discussed with (Greek Prime Minister Alexis) Tsipras tomorrow," a senior EU official said.

Another official said German Chancellor Angela Merkel and French President Francois Hollande would put the plan to Mr Tsipras by telephone within hours to try to secure his acceptance.

A Greek government official said Mr Tsipras would travel to Brussels on Wednesday for a meeting with European Commission President Jean-Claude Juncker in the evening, upon Mr Juncker's request. "The prime minister will be in Brussels tomorrow with the Greek proposal in his luggage," the official said.

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Mr Tsipras, who has vowed not to surrender to more austerity, tried to pre-empt a take-it-or-leave-it offer by the creditors, sending what he called a comprehensive reform proposal to Brussels on Monday before they could complete their version.

Euro zone officials branded the Greek text insufficient and said it was not formally on the table.

The Greek leader faces a backlash from his own supporters if he has to accept cuts in pensions and job protection to avert a default and keep Greece in the euro zone.

Despite defiant rhetoric and face-saving efforts, he seems likely to have to swallow painful pension and labour reforms, facing the choice between putting them to parliament at the risk of a revolt in his Syriza party, or calling a snap referendum.

Starved of aid and access to bond markets, Athens is precipitously close to running out of money. It has threatened to default on an IMF payment this week without a deal, though it also says it will reject any ultimatums.

Failure to reach agreement this month could trigger a Greek default and lead to the imposition of capital controls and a potential exit from the euro zone, dealing a serious blow to Europe's supposedly irreversible single currency.

The euro zone source said the Greek document contained no significant concessions on the main outstanding issues of pension and labour market reform, fiscal targets and the size of the civil service.

The European Union's economics chief said earlier Athens had put forward first proposals for pension reform as the talks reach a crunch point this week with Greek funds drying up.

The chairman of euro zone finance ministers, Jeroen Dijsselbloem, who was not at the Berlin meeting, said there were growing indications that Greece wanted a deal, but that required the Greek government to tell its voters the truth, that it will not be able to deliver on all its election promises. "There are signs that Greece and Tsipras are motivated to achieve a breakthrough," Mr Dijsselbloem told RTL Nieuws. "We aren't far enough along and time is pressing." "The bottom line is that we are not going to meet them halfway," he said. "The package as a whole must make sense in budgetary terms." "

The Berlin meeting showed that national and international leaders have taken the battle to keep Greece in the euro zone into their own hands after months of insisting it was a matter for technical negotiations among experts.