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Jul 9, 2015 6:38 PM

The Latest: Greece seeks 53.5B euros in new bailout package

The Associated Press

ATHENS, Greece (AP) The latest from the Greece's financial crisis (all times local):


1:34 a.m.

Greece is seeking 53.5 billion euros ($59 billion) as part of a new bailout package, according to draft legislation submitted to parliament early Friday.

Under the proposal, Athens would receive the loans from the eurozone bailout fund, the European Stability Mechanism, or ESM.

Greece's left-wing government has sent eurozone creditors a proposed new austerity package. The government says Greece's parliament will vote on the proposals late Friday before an emergency summit Sunday by European leaders.


12:53 a.m.

Greece's government has agreed to longstanding demands by creditors to impose sweeping sales tax hikes and cuts in state spending for pensions.

In the text of proposals sent by Athens, and seen by The Associated Press, the government concedes to demands it had previously resisted, mostly on moving various categories of goods and services to higher sales tax rates.

The proposals were sent in a last-ditch effort to reach a deal with rescue lenders after the country's previous program expired and missed repayments to the International Monetary Fund, and Greece was forced to close banks to prevent their collapse under the weight of mass withdrawals.


11:20 p.m.

The head of the eurogroup has received the proposals of the Greek government that are necessary to discuss a deal by Sunday to stave off financial collapse in the nation.

Beating a midnight deadline by almost two hours, the spokesman for Dutch eurogroup President Jeroen Dijsselbloem tweeted that the proposals were received and that it was "important for institutions to consider these in their assessment" of the Greek situation.

Eurogroup finance ministers are meeting on Saturday to discuss them and prepare a Sunday summit of European Union government leaders, widely seen as the decisive meeting on the Greek bailout crisis.


10:00 p.m.

Greece's energy minister is urging the government not to sign a third bailout, despite the risk of the country being forced out the euro.

Energy Minister Panagiotis Lafazanis told a business conference Thursday that "the choices we have are tough ... but the worst, the most humiliating and unbearable is an agreement that will surrender, loot and subjugate our people and this country."

He said Greece had voted 'no' in last weekend's referendum "and that will not be turned into a humiliating 'Yes.'"


7:20 p.m.

Greek Defense Minister Panos Kammenos says the Greek government's economic reform proposals will be submitted "in the next few hours."

Athens must submit the proposals by midnight Thursday Brussels time, so they can be reviewed by the country's creditors ahead of a summit of European leaders on Sunday.

European creditors have described this as Greece's last chance to produce a credible and realistic list of reforms in order to receive bailout cash and prevent the country from crashing out of the euro.

Athens on Wednesday requested a third bailout, and promised to "immediately" implement reforms including to taxes and pensions.


6:20 p.m.

German Finance Minister Wolfgang Schaeuble has rejected the notion that Germany should take the lead in solving Greece's debt woes because his country itself benefited from debt forgiveness in the past.

Germany's debts were written down by more than half in 1953, a step which helped launch the country on the path of growth after the destruction of World War II. Greece was among the countries that signed the agreement forgiving Germany.

Schaeuble said the situations "are not comparable" and the comparison "misleading," in response to a question from Harvard University's Benjamin Friedman at an economic conference in Frankfurt.

Schaeuble said Greece's economy was not competitive and that Greece's economic institutions "did not correspond to the minimum requirements" even before the debt crisis broke out in 2009.


6:10 p.m.

A prominent lawmaker from Greece's opposition conservative New Democracy party says there is enough support in parliament to approve any bailout deal that the government strikes with its creditors.

Dora Bakoyannis said after an hour-long meeting with European Commission President Jean-Claude Juncker she's hopeful a deal can be reached that prevents Greeks from having "to pay the price for amateurishness, obsessiveness and egotism."

Another New Democracy lawmaker Kostas Hatzidakis said the overwhelming majority of Greeks want to stay in the EU and the eurozone.

Greece faces a midnight deadline Brussels time to send euro partners detailed economic reform proposals that will accompany any bailout loans. On Wednesday, Greece submitted a request for a three-year bailout.

European leaders meet Sunday in Brussels to decide whether the Greek government has done enough to get the bailout. Without the money, it faces bankruptcy and falling out of the euro.


5:45 p.m.

German Finance Minister Wolfgang Schaeuble says the possibility of some kind of debt relief for Greece will be discussed over coming days but he doesn't see much room for maneuver.

Germany is ruling out an outright debt cut, arguing that it would be illegal under European treaties. It's also resisted calls for any debt relief for Greece unless the country undertakes serious economic reforms.

The International Monetary Fund has argued that Greece's debt needs restructuring, if not by a so-called haircut then through other means, such as lengthening the time the country has to pay its debts.

At a conference in Frankfurt, Schaeuble noted that a private-sector debt restructuring was carried out in 2012, which went further than IMF proposals at the time.

Schaeuble said "the room for maneuver through debt reprofiling or restructuring is very small."


4:55 p.m.

Germany's Finance Minister Wolfgang Schaeuble says Greece could start rebuilding trust with its partners in the 19-country eurozone by taking immediate actions to reform its economy.

Schaeuble said at a conference in Frankfurt that "we have always said there need to be prior actions, actions meant to build trust, and I don't see any prior actions."

Schaeuble, who has been skeptical of the Greek government's commitment to reform, conceded the chance of such actions before Sunday's European summit on the Greek crisis was "rather limited."

However, he did say that new Greek Finance Minister Euclid Tsakalotos was "more conventional than his predecessor" the confrontational Yanis Varoufakis.

Greece's euro partners are awaiting a last-chance proposal from Greece for bailout loans to keep it from running out of money and possible leaving the euro.


4:20 p.m.

Olivier Blanchard, director of research at the International Monetary Fund, says Greece's troubles pose little threat to the broader global economy.

In a statement Thursday, Blanchard said the world economy has "withstood the stress tests of the last two weeks fairly well."

Blanchard noted that Greece makes up just 2 percent of the 19-nation eurozone's economy and less than 0.5 percent of the world's economy.

"We continue to hope for and work toward a positive solution by which Greece remains in the eurozone," he says. "There is little question that Greece is suffering and may suffer even more under the scenario of a disorderly exit from the Eurozone. But the effects on the rest of the world economy are likely to be limited."


4 p.m.

Chancellor Angela Merkel has reiterated that Germany opposes an outright debt cut for Greece.

Merkel said during a visit Thursday to the Bosnian capital, Sarajevo, that "a classic haircut is out of the question for me. That hasn't changed between the day before yesterday and today."

Greece has to produce a finalized reform plan by the end of the day. Merkel says she isn't in a position to assess whether that plan will meet creditors' expectations.

Greece is seeking debt relief and the International Monetary Fund argues that the country's massive debt does need restructuring. Germany, though, has resisted calls for debt relief before Greece announces economic reforms.


3:35 p.m.

The eurozone's 19 finance ministers are set to meet on Saturday to assess Greek proposals to secure another financial bailout, which would ease the pressure on the country's economy and avoid its potential exit from the euro.

The afternoon meeting in Brussels will also prepare the ground for Sunday's summit of the 19 eurozone leaders, which will be followed by one of the wider European Union, which will involve all 28 leaders, officials said.

Sunday has the feel of being a make-or-break date for Greece. Without a deal, Greece could effectively be left to its own devices by Monday morning. And that could mean the collapse of its banks and the return of the country's ancient currency, the drachma.

In the run-up to the weekend meetings, the mood music surrounding Greece appears to be getting more positive. Markets certainly think so, with the Stoxx 50 index of leading European shares up 2.1 percent Thursday.


3:10 p.m.

Irish Finance Minister Michael Noonan thinks it's probable that Greece can strike a third bailout deal with European partners this weekend.

He credits Athens' switch of finance minister for improving the negotiating mood and repairing trust.

Speaking to Newstalk radio in Dublin, Noonan said this week's surprise replacement of Yanis Varoufakis with Euclid Tsakalotos has encouraged others at the table to believe that Athens wants a realistic deal, not endless brinkmanship.

For months, Noonan said he and his peers in the 19-country eurozone found Varoufakis evasive and difficult to pin down on specifics.

On the other hand, Noonan said he found Tsakalotos, at his first eurogroup meeting Tuesday, straightforward and "interesting," citing his background as a wealthy Marxist economist.

"It seems now they are serious," said Noonan, who now rates the chance of a deal with Greece at "better than 50 percent."


2:50 p.m.

European stock markets pushed higher after a leading official indicated that discussions over Greece's debt burden should be on the table in Sunday's summit of the European Union's 28 leaders.

The Stoxx 50 index of leading European shares was up 2 percent.

The advance came after Donald Tusk, who will chair this Sunday's meeting in his capacity as European Council President, said any Greek deal should include proposals from creditors over how to make the country's debts sustainable.

In a tweet, Tusk said Greece's reform proposals, due later, need to be "matched by (a) realistic proposal from creditors on debt sustainability to create win-win situation."


1:55 p.m.

Donald Tusk, who will chair this Sunday's meeting of European leaders, says any Greek deal has to be matched with realistic proposals from creditors over how to make the country's debts sustainable.

In a tweet, Tusk said Greece's reform proposals, due later, need to be "matched by (a) realistic proposal from creditors on debt sustainability to create win-win situation."

Tusk's call echoes comments from Christine Lagarde, the International Monetary Fund's managing director, on Wednesday.

Greek Prime Minister Alexis Tsipras has insisted that debt relief should form part of any resolution to the Greek crisis at Sunday's summit of the European Union's 28 leaders. Germany, though, has resisted calls for debt relief without reforms.

Tusk also said in a tweet he expects, following a telephone call with Tsipras, to receive "concrete, realistic reform proposals today" from Greece.


1:30 p.m.

Russian Foreign Minister Sergey Lavrov says it would be wrong to say his country is enjoying the spectacle of Europe struggling to deal with Greece's debt crisis.

He said Russia has no interest in "throwing kindling onto this fire," and wants to see a quick resolution acceptable to all sides.

Russia, he said, is interested in a "strong, functioning, economically growing European Union.

Any idea that Moscow is rubbing its hands over the crisis European partners is wrong, he added.

"It is a distortion of our position and our interests," he said.

Relations between the European Union and Russia are at a low ebb as both sides have exchanged sanctions over the crisis in Ukraine.

There has been talk in recent weeks that Russia may help Greece out financially but that has been dismissed by the Kremlin.


12:50 p.m.

European markets are posting solid gains amid hopes Greece will finalize a plan of reforms and following a rebound in Asia.

Among major indexes, Germany's DAX was up 1.4 percent while France's CAC 40 rose 1.6 percent. The euro, however, was down 0.4 percent at $1.1035. The Athens stock market remained closed, alongside the banks.

The Greek government has until the end of the day to submit a plan of economic measures it will take in exchange for a new three-year program of loans. The creditors will review the measures before European leaders convene Sunday to decide on Greece's fate.

"Signs of unhappiness at the proposed deal could easily reverse the good feeling ... but for now markets just appear to be pleased that negotiations are underway once again," said Chris Beauchamp, senior market analyst at IG.


11:15 a.m.

A German member of the European Central Bank's governing council says Greek banks should not get more emergency credit from the central bank unless a bailout deal is struck.

Jens Weidmann said in a speech Thursday it's up to eurozone governments and Greek leaders themselves to rescue Greece.

Weidmann said the central bank "has no mandate to safeguard the solvency of banks and governments."

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 deposit flight.

Weidmann said he welcomed the fact that central bank credit "is no longer being used to finance capital flight caused by the Greek government."


10:45 a.m.

EU Economics Commissioner Pierre Moscovici is hopeful that a new Greek bailout deal is possible, in exchange for "concrete, complete" reform proposals from Greece's government.

Moscovici said Thursday on France-Inter radio that Thursday is "a decisive day" for Europe, as Greece's creditors await a detailed economic reform plan from Greek Prime Minister Alexis Tsipras' government before a midnight deadline.

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

Greece requested a new three-year rescue from its European partners Wednesday. International creditors disagree over whether to award the country debt relief. Moscovici said that is not currently under discussion.


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