Greek Prime Minister Alexis Tsipras appealed to his party’s lawmakers on Friday to back a tough reform package after abruptly offering last-minute concessions to try to save the country from financial meltdown.
With creditor institutions due to deliver an initial verdict on Athens’ loan request and reform proposals within hours, euro zone partners appeared to be preparing for a deal at the weekend to keep Greece in the euro zone. After walking into a party meeting to applause, Tsipras tried to rally his Syriza lawmakers behind the new proposals ahead of a snap vote in parliament expected late on Friday. He urged them to help Greece stay with the euro, but he faced some resistance from leftists stunned by his acceptance of previously spurned austerity measures. “We are confronted with crucial decisions,” Tspiras told his party caucus. “We got a mandate to bring a better deal than the ultimatum that the Eurogroup gave us, but certainly not a mandate to take Greece out of the euro zone,” he said. “We are all in this together.”
Even with a rebellion from within his own ranks, Tsipras was assured of backing from opposition lawmakers to carry the vote, but his political position would be weakened. The centrist opposition To Potami party and the main centre-right opposition New Democracy said they would support him.
Germany, which has contributed more to bailouts than any other country, sounded wary. A finance ministry spokesperson ruled out any debt restructuring that would lower its real value.
France President Francois Hollande called the offer “serious and credible”. Eurogroup head Jeroen Dijsselbloem described it as a “thorough piece of text”. The lenders’ backing is crucial for euro zone leaders to support the proposals. Dijsselbloem, European Commission President Jean-Claude Juncker, European Central Bank President Mario Draghi and International Monetary Fund head Christine Lagarde discussed the plan in a teleconference.
The euro gained more than 1% against the dollar and European markets rallied on the improved prospects for a last-ditch deal to keep Greece in the currency area. Italian, Spanish and Portuguese bond yields fell, reflecting perception of reduced risk.
Eurozone finance ministers will make a ‘major’ decision Saturday on the latest proposals from Athens on a fresh bailout plan, Dijsselbloem said on Friday.