ATHENS, Greece (AP) — Greece finally met a deadline that counted on
Thursday, delivering a series of sweeping proposals to its creditors
before midnight to set off a mad rush toward a weekend deal to stave off
a financial collapse of the nation.
The package of reforms raised
hopes that Greece can get a rescue deal that will prevent a
catastrophic exit from the euro after key creditors said they were open
to discussing how to ease the country's debt load, a long-time sticking
point in their talks.
In a significant about-face, the government
caved into demands for a new round of austerity measures, including
sales tax hikes and cuts in state spending for pensions that the
left-leaning Greek government had long resisted.
In the text of
proposals sent by Athens late Thursday, the government conceded to
demands it had previously refused to accept — mostly on moving various
categories of goods and services to higher sales tax rates — in exchange
for a new 53.5 billion-euro ($59 billion) bailout package.
Many
of the proposed reforms were harsher than those roundly rejected by the
Greek public in a bailout referendum last Sunday. But the government
said, in return, it "would seek a commitment from creditors to negotiate
... further measures to restructure the long-term debt."
The
government scheduled an emergency vote in parliament late Friday to win
backing for the belt-tightening plan and said it believed it had the
support needed for an endorsement.
After months of foot-dragging
despite impending chaos, Greek Prime Minister Alexis Tsipras met a
midnight deadline with more than an hour to spare. The spokesman for
eurogroup President Jeroen Dijsselbloem tweeted that it was "important
for institutions to consider these (proposals) in their assessment" of
the Greek situation.
Finance officials from the European
institutions and the International Monetary Fund were to fine-comb
through the package on Friday before the 19 eurozone finance ministers
assess it on Saturday.
In ideal circumstances, a summit of all 28 European Union leaders would be able to approve it on Sunday.
Earlier
Thursday, Donald Tusk of Poland, who chairs the EU summits, indicated
that European officials would make an effort to address Greece's key
request for debt relief.
"The realistic proposal from Greece will
have to be matched by an equally realistic proposal on debt
sustainability from the creditors. Only then will we have a win-win
situation," Tusk said.

Pro-European Union protesters gather in
front of the Greek parliament in Athens on July 9, 2015. (LOUISA
GOULIAMAKI/AFP/Getty Images)
Greece has long
argued its debt is too high to be paid back and that the country
requires some form of debt relief. The International Monetary Fund
agrees with the premise, but key European states like Germany have
resisted the idea.
On Thursday, German Finance Minister Wolfgang
Schaeuble said the possibility of some kind of debt relief would be
discussed over coming days, though he cautioned it may not provide much
help.
"The room for maneuver through debt reprofiling or restructuring is very small," he said.
Making
Greece's debt more sustainable would likely involve lowering the
interest rates and extending the repayment dates on its bailout loans.
Germany and many other European countries rule out an outright debt cut,
arguing it would be illegal under European treaties.
Tsipras met
with finance ministry officials and his cabinet throughout the day
Thursday to finalize his country's plan, a day after his 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.
The last-minute maneuvers come as Greece's financial
system teeters on the brink of collapse. It has imposed restrictions on
banking transactions since June 29, limiting cash withdrawals to 60
euros ($67) per day to stanch a bank run. Banks and the stock market
have been shut for just as long.
The closures, which have been
extended through Monday, have led to daily lines at ATM machines and
have hammered businesses. Payments abroad have been banned without
special permission.
"Can you see anybody in the shop? Nobody's
coming in, because everyone's living off a drip," said Magda Petridi, a
fortune teller who runs a shop selling good luck charms, aromatic oils
and trinkets. "Until a month ago business was going pretty well."

A pensioner solves a crossword puzzle as he waits to enter a bank in Athens, July 9, 2015. (AP Photo/Thanassis Stavrakis)
Pensioners
without bank cards have been particularly hard hit as they have
struggled to access their accounts. Some branches have been opened so
the elderly and unemployed without bank cards can withdraw a maximum
weekly sum of 120 euros each. Hundreds lined up outside banks Thursday
morning, many facing hours-long waits in the heat.
Meanwhile, many ATMs had a shortage of 20 euro notes, effectively reducing the daily withdrawal limit to 50 euros.
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 had insisted they
wanted to see a detailed, cost-accounted plan of reforms.
Greece's
financial institutions have been kept afloat so far by emergency
liquidity assistance from the European Central Bank. But the ECB has not
increased the amount in days, leaving the lenders in a stranglehold
despite capital controls.
German ECB governing council member Jens
Weidmann argued Greek banks should not get more emergency credit from
the central bank unless a bailout deal is struck.
He said it was up to eurozone governments and Greek leaders themselves to rescue Greece.
The central bank "has no mandate to safeguard the solvency of banks and governments," he said in a speech.
The
ECB capped emergency credit to Greek banks amid doubt whether the
country will win further rescue loans from other countries. The banks
closed and limited ATM withdrawals because they had no other way to
replace deposits.
Weidmann said he welcomed the fact that central
bank credit "is no longer being used to finance capital flight caused by
the Greek government."
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