Greeks offer tax, pension reforms

ATHENS – Greece asked its European partners for a new three-year bailout Wednesday as the clock ticked down on a weekend deadline for an agreement to keep the nearly bankrupt nation in the eurozone.

A letter from the Greek government said Athens was willing to begin implementing tax and pension reforms as early as next week as part of a deal to secure desperately needed emergency loans from the European Stability Mechanism, a rescue fund set up to deal with Europe’s long-running debt crisis.

Although the reforms were not specified, changes to pensions and tax rates have long been “red lines” that Greece’s left-wing government has said it would not cross. Their inclusion here suggested that Athens was willing to yield on those points to expedite an agreement and avert financial catastrophe.

The letter formally kicked off a process that Athens hopes will culminate in a bailout deal with its European partners by Sunday. Without at least a preliminary agreement by then, Greece’s banks are expected to run out of cash as early as Monday, and the country would almost surely be on the road to crashing out of the eurozone, the club of 19 nations that share the euro currency.

Greek officials are scrambling to put together a more thorough plan to present to the other eurozone nations by today detailing how they expect to restructure their economy, cut spending and increase tax receipts in exchange for bailout loans.

Whether such a highly technical proposal can be put forward and successfully negotiated by Sunday, before an emergency summit of all 28 European Union nations, is in some question. The deadline was imposed Tuesday by eurozone leaders frustrated by their ongoing impasse with Athens over a funding deal after nearly six months of often acrimonious talks.

European officials warned that without credible terms on the table from Athens, they were not prepared to do any more to keep Greece from slipping into financial chaos.

The biggest pressure on Athens right now is the country’s banks, which are being propped up through emergency assistance from the European Central Bank. But the central bank said the aid can’t be extended past Sunday without a clear signal that Athens and its creditors are close to an agreement.

If the lifeline is cut off, Greek banks will go under within days, if not hours, sparking financial upheaval and panic among depositors.

Greek banks have been closed since June 29 to prevent a run on cash.