Greece to present creditors with proposal, Germany skeptical

Athens: Greece says it will present to its creditors by Thursday a proposal aimed to save bailout talks from collapse, as time is running out for a deal that would keep the country solvent and within the euro currency bloc.

Germany, the main European creditor, was quick to say it was deeply skeptical, while the European Commission said it would like to see precisely what the proposal entailed.

Greek government spokesman Gavriil Sakellaridis said Athens' plan would involve extending the 240 billion euro international loan agreement that has kept the country afloat since 2010 but, apparently, without the required spending cuts and tax hikes.

"We believe the terms of the bailout cannot continue by any means," Sakellaridis told private Antenna TV. Officials said the proposal would be sent by late Thursday.

Greek shares closed 1 per cent up in afternoon trading, after days of losses, and the Euro Stoxx 50 index rose 0.5 per cent.

The budget measures have become a major sticking point at this stage of the negotiations.
Both sides agree Greece needs external support to keep it afloat and buy time for more thorough talks.

The new radical left-led government in Athens, however, insists it will not accept any extension of the bailout loans if it requires a continuation of the budget austerity measures such as spending cuts or tax hikes.

It blames the measures for worsening an economic depression that sent unemployment above 25 per cent and won general elections last month on the promise to scrap them. The creditors in the 19-country eurozone say Greece should extend its loans program, but only if it agrees to continue its austerity program. The eurozone has given Greece until the end of the week to agree to that.

Finance Minister Yanis Varoufakis told his eurozone counterparts this week that Greece was "ready and willing to apply for an extension of our loan agreement till the end of August, or any other duration that eurogroup may deem fit."