Creditors cautiously optimistic over Greece’s debt reform plan

BRUSSELS – Greece has finally offered economic reforms that creditors consider potentially acceptable, giving Prime Minister Alexis Tsipras a couple days to turn a spirit of goodwill into a deal that might keep the country from a painful exit from the euro currency.

Even though a firm deal to get Greece more loans remained elusive Monday, leaders from the 19 euro nations and the International Monetary Fund said Tsipras’ new reforms plan offered the basis to break a four-month deadlock in talks.

Uncertainty over Greece has sapped confidence in global markets, particularly in Europe, and threatened the financial future of Greeks.

“I want to end this political gambling,” said European Union President Donald Tusk at an emergency summit on the issue.

In its compromise proposal, Greece is offering about 8 billion euros ($9 billion) in higher taxes and austerity measures over the next two years, a Greek government official said on condition of anonymity because the measures had not been officially announced.

Financial officials gave a tentative endorsement to Greece’s proposals for spending cuts and reforms it would make in exchange for billions of euros in fresh loans. Greece needs the money urgently as it faces a June 30 debt repayment it cannot afford.

Tusk said Greece’s plans, which include retirement reform and sales tax changes, “were the first real proposals in many weeks.”

“It’s an opportunity to get that deal this week,” said Jeroen Dijsselbloem, the Dutchman who chaired an emergency meeting of eurozone finance ministers ahead of the summit.

Leaders are now looking at a two-day European Union summit starting Thursday in Brussels to make the final thrust in the talks and reach a deal that will keep Greece solvent.

The proposals will impose new taxes on businesses and the wealthy but no further cuts in pensions or public sector salaries, which remain a “red line” for the left-wing government of Tsipras.

Athens will make tougher rules on early retirement and shift some categories of goods to a higher sales tax bracket, including hotels and certain foods. Emergency bailout taxes that had been imposed will remain, even though Tsipras had pledged to phase them out.

The official said employers will have to contribute higher social security contributions to pension and unemployment funds.