European Markets Spike On Greek Proposals

ATHENS, Greece (AP) – Greek Prime Minister Alexis Tsipras sought his left-wing party’s backing on Friday for a new budget austerity package that is harsher than what he urged Greeks to reject in a vote just last week, but would provide the country will longer-term financial support.

His call for a vote of “national responsibility” came as an European Union source in Brussels said the country’s latest debt proposals were “positive” enough to form the basis of a massive new bailout worth €74 billion.

In the text of proposals sent by Athens late Thursday, the government conceded to demands it had previously refused to accept – mostly on moving various categories of goods and services to higher sales tax rates – in exchange for a new €53.5 billion ($59 billion) bailout package.

Finance ministers of the 19-nation euro area will meet on Saturday to decide whether to recommend opening negotiations on a third bailout program for Athens despite widespread exasperation at the five-year-old Greek debt crisis.

The Greek government will ask the country’s parliament on Friday to authorise it to negotiate a list of “prior actions” it would take before any fresh aid funds could be distributed.

The recent referendum on July 5 on the austerity measures was rejected by more than 61% local citizens.

Tsipras convened his party’s lawmakers for closed-door discussions Friday morning before the parliamentary debate.

In a sign of possible trouble ahead, the head of Tsipras’s junior coalition ally – which has threatened to pull the plug on the government if the island tax breaks were scrapped – did not add his signature to the reform proposals.

The entire 28-member European Union will hold an emergency summit Sunday to consider the Greek situation.

But France, Greece’s strongest supporter in the euro zone, rushed to offer praise with President Francois Hollande calling the offer “serious and credible”.

Eurogroup Chief Jeroen Dijsselbloem said eurozone finance ministers are set to make a major decision on Saturday.

However, this weekend, European Union finance ministers will be tasked with evaluating the proposal with a fine-tooth comb. They want to ensure that the proposed cuts actually add up to the figures Greek officials have projected.

Bank closures in Greece have been extended until Monday and Greeks are limited to withdrawing just 60 euro (£43) per day after the imposition of capital controls. All money transfers overseas, including bill payments, were banned without special permission.

The chairman of Eurogroup finance ministers confirmed receiving the documents but will not comment until they have been assessed by experts from the European Commission, European Central Bank and global Monetary Fund. U.S. stock futures jumped 1 percent in early Asian trade on the announced measures.

Several thousand anti-government protesters demonstrated in central Athens Friday night in a communist-backed rally.

The near-bankrupt country can not access worldwide bailout aid without first agreeing with its creditors on economic reforms that will be implemented by Athens in return for The support.

But it was forced to resume talks with creditors as Greek banks faced the prospect of collapse within days if the country did not receive a new rescue package.

Some other eurozone members are also likely to oppose any debt writedown for Greece.

Michael Fuchs, a senior Christian Democrat parliamentarian, said: “We have to be very careful because honestly, because I have a little bit of a problem to trust it because what is the difference between Sunday and today?”