Greece rushing to finalize reforms and remain in euro

Published 8:54 am Thursday, July 9, 2015

ATHENS, Greece — Greece’s government was racing Thursday to finalize a plan of reforms for its third bailout, hoping this time the proposal will meet with approval from its European partners and stave off a potentially catastrophic exit from Europe’s joint currency, the euro, within days.

Prime Minister Alexis Tsipras was meeting with finance ministry officials a day after the government requested a new three-year aid program from Europe’s bailout fund and promised to immediately enact reforms, including to taxes and pensions, in return.

Details of Greece’s reforms are to be submitted Thursday, giving time for creditors to review them ahead of a summit of the European Union’s 28 members set for Sunday.

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Thursday is “a decisive day” for Europe, EU Economics Commissioner Pierre Moscovici said on France-Inter radio, adding he was hopeful a new Greek bailout deal was possible, in exchange for “concrete, complete” reform proposals.

“I have the sense that the dialogue is established, or restored, and that there is a way out,” Moscovici said. Failure to reach a deal could be the first step toward Greece leaving the shared euro currency.

The last-minute negotiations come amid bank closures in Greece, where capital controls have been imposed that restrict Greeks to cash withdrawals of 60 euros ($67) per day.

The closures have been extended through Monday.

Pensioners without bank cards have been particularly hard hit as they have struggled to access their accounts. Certain bank branches opened last week to allow them to withdraw a weekly allowance of 120 euros each.

The government announced Wednesday that this was being renewed so they could withdraw the same sum. Hundreds of elderly Greeks lined up outside banks Thursday morning.

If Tsipras does not get a deal, Greece faces an almost inevitable collapse of the banking system, which would be the first step for the country to fall out of the euro.

“I believe he will have to get an agreement. We will pay dearly for it, but at least we’ll get an agreement,” said mechanic Pantelis Niarchos, walking down the street in central Athens.

After months of fruitless negotiations with Tsipras’ government, elected in January on promises to repeal bailout austerity, the skeptical eurozone creditor states have said they want to see a detailed, cost-accounted plan of the reforms.

But Greece’s major creditors disagree on key aspects of how to deal with the struggling but defiant EU member.

International Monetary Fund chief Christine Lagarde reiterated Wednesday that Greece’s massive debt would need restructuring, something that Germany — Greece’s largest European lender — has resisted.