Europe

Greece debt crisis: Eurozone receives economic reform plan

Greek Prime Minister Alexis Tsipras (C, back) leaves his office in Athens, Greece, 09 July 2015 Image copyright EPA
Image caption Alexis Tsipras (centre, at back) spent much of the day thrashing out the agreement with his cabinet

The Greek government has submitted economic reform proposals to try to secure a further bailout from its creditors, eurozone officials say.

They say they received the plan late on Thursday - just two hours before a midnight deadline. They will now study it ahead of EU meetings at the weekend.

The measures include tax rises, pension reforms, privatisation and spending cuts, Greek media say.

Greece needs a third bailout to avoid a default and a possible euro exit.

'No capitulation'

Jeroen Dijsselbloem, the head of the 19-member eurozone group of finance ministers, confirmed that he had received the Greek proposals.

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Media captionTim Willcox in Athens explains the new Greek proposals

Earlier, Greek Prime Minister Alexis Tsipras spent the day seeking agreement on the reforms from his government partners.

On Friday, the Greek parliament will vote on Mr Tsipras' proposals. The plan will be then considered by eurozone finance ministers on Saturday, and by EU leaders at a summit in Brussels on Sunday.

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Greek voters decisively rejected previous austerity proposals from the country's lenders in a referendum on Sunday.

According to Greek media reports, the measures submitted on Thursday include:

  • tax rise on shipping companies and scrapping tax discounts for islands
  • unifying VAT rates at standard 23%, including restaurants and catering
  • phasing out solidarity grant for pensioners by 2019
  • €300m ($332m; £216m) defence spending cuts by 2016

Greece in numbers

€320bn

Greece's debt mountain

€240bn

European bailout

  • 177% country's debt-to-GDP ratio

  • 25% fall in GDP since 2010

  • 26% Greek unemployment rate

Reuters

Although reforms rejected in the referendum will now be conceded, this is no capitulation by Mr Tsipras, the BBC's Chris Morris in Brussels reports.

He is asking for far more in return than was on offer last month, our correspondent adds. Greece is reportedly seeking €53.5bn as part of a new bailout package and restructuring of its huge debt burden.

Earlier on Thursday, European Council President Donald Tusk said creditors would need to respond to Greece's reform plans with a "realistic proposal on debt sustainability".

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Mr Tusk's comments could be seen as supporting calls to reduce Greece's debt burden.

But the German Chancellor Angela Merkel ruled out debt reduction, saying she was against "the classic haircut".

Greek banks have been closed for nearly a fortnight with limits placed on cash withdrawals.


Crisis countdown

  • Friday 10 July: Greek parliament vote. ECB, EU and IMF discuss proposals at technical level
  • Saturday 11 July: Eurozone finance ministers discuss plans (Brussels 13:00 GMT)
  • Sunday 12 July: Eurogroup leaders meet (14:00 GMT) followed by summit of all 28 members of the European Union (16:00 GMT). Both Brussels
  • Monday 20 July: €3bn payment due from Greece to the European Central Bank

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