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 about 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.
Financial officials gave a tentative endorsement to Greece’s proposals for spending cuts and reforms they 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 was chairman of 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.
Multiple deadlines for Greece to propose more reforms have come and gone, with the country living hand to mouth in the meantime. But French President François Hollande said “better to take a few days, but get to an agreement.”
German Chancellor Angela Merkel agreed, saying “there are still a lot of days left to come to a decision.”
The more cooperative spirit gave a boost to stock markets. Athens shares closed 9 percent higher. The Stoxx 50 index of top European shares was somewhat less volatile and closed up 4.1 percent.
The need for a deal could not be more pressing. Greece must pay $1.8 billion to the IMF on June 30. Further payments are due in July and August, and the left-wing government in Athens does not have the money to pay them.
A debt default by Greece could destabilize its banks – Greeks are already withdrawing increasingly large amounts of money – and could, in a worst case scenario, cause the country to have to leave the euro.
That would be hugely painful for Greeks, but experts are more divided about its effects on Europe and the world economy. Several European countries have said publicly they are getting prepared for the possibility.
