Greece’s international creditors believe its latest debt proposals are positive enough to be the basis for a new bailout worth 74 billion euros, an EU source said Friday.
“There has been positive evaluation of the Greek programme,” the source said, with the EU’s bailout fund, the European Stability Mechanism ready to consider putting up 58 billion euros plus 16 billion euros from the International Monetary Fund for what would be a third debt rescue.
The source, who asked not to be named, said the creditor’s assessment of the Greek plan would now go to the Eurogroup of 19 eurozone finance ministers who meet Saturday but it stood only a “50-50” chance of approval due to opposition by hardliners such as Germany who oppose any debt relief for Athens.
The finance ministers in turn will prepare a report for eurozone leaders who meet Sunday, followed by an emergency summit of heads of government from all 28 EU member states.
The Greek parliament is expected to vote shortly on the package of reforms left-wing Premier Alexis Tsipras promised his EU peers in return for a new bailout to save Greece from crashing out of the eurozone.
Tsipras rejected a similar plan last month, sparking an immediate crisis over his country’s finances as the creditors — the EU, the IMF and the European Cental Bank pulled the plug on the country’s second debt rescue.
In the latest proposals for a three-year programme, Tsipras gave ground on major sticking points, including creditors’ demands to overhaul pensions, increase sales taxes and commit to major privatisations.
Tax breaks for Greece’s islands and cuts to military spending remain sticking points, as do his demands that the creditors offer some relief on the country’s 320-billion-euro ($350-billion) debt mountain.
Greek Finance Minister Euclid Tsakalotos said Friday he believed “many” of the demands for debt relief would be accepted by the eurozone.
He said he was confident Greece would be permitted to roll over a debt of 27 billion euros ($30 billion) in bonds held by the ECB to the ESM, helping to reduce the cost to the government.