Greek PM Tsipras defends ‘difficult’ choices over bailout

The measures include tax rises, pension reforms, privatisation and spending cuts, Greek media say.

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.

While European officials predict major consolidation in the sector, which may see some Greek banks taken over by stronger rivals as part of a restructuring that would follow a bailout of the country, the banker said mergers of the big four would be opposed in Athens.

In a bid to head off a possible challenge to the measures within his hard-left party Syriza, Tsipras urged lawmakers “to stand united and firm in front of these important decisions”.

The coalition government has 162 and pledged backing from a large section of opposition lawmakers. But failure to deliver votes from his own government would likely topple his coalition.

French President Francois Hollande says the Greek proposals are “serious and credible” but stressed that nothing is final yet.

France’s Socialist government has been among the Greek government’s few allies in the eurozone during the past months of tough negotiations.

It is very likely that the European Commission, the global Monetary Fund and the European Central bank would give their green light tomorrow to a Greek reform plan, opening the way for a third bailout, which would eliminate the risk of the country leaving the eurozone.

“The three institutions are now… analyzing these proposals with the intention to communicate their assessment to the Eurogroup before the end of the day”, Commission spokesman Margaritis Schinas said in Brussels.

Alternate Finance Minister Dimitris Mardas said the banks would be gradually restored to operation.

As the government inched closer to a deal to ensure Greece doesn’t crash out of Europe’s joint currency, some Greeks adopted a “wait and see” approach.

“I don’t know. The chances are 50-50″ for a deal, said Athens resident Omiros Fotiadis.

The Tsipras proposal is to keep some sales taxes at existing levels, a low 6% on pharmaceuticals, books and theatre; a modest 13% VAT on basic foodstuffs, hotels, energy and water; but conceding, unlike before the referendum, an increase to 23% for restaurants and catering, this rate also applied to most other things.

The measure must then be reviewed and accepted by other eurozone countries, the European Central Bank and the International Monetary Fund, all of whom hold Greek debt.

Last weekend, the high drama was at polling places across Greece: Would Greek citizens vote for or against the bailout proposal?

The possibility of a breakthrough sent stock markets soaring in Europe, Asia and the United States on Friday.

“We are at the stage now of making it up as we go along”, John Cochrane, economist and senior Hoover Institution fellow, said of the Greek leadership attempting to keep the economy afloat with a rapidly disappearing stash of euros.

“But even then we need to consider carefully whether the proposal is good and if the numbers add up”.

Meanwhile, Greek banks remained shut since the start of last week and cash withdrawals were restricted to e60 per day. All money transfers overseas, including bill payments, require special permission.

“Liquidity is assured at the daily 60 euro withdrawal limit until Monday night”, the banker said, declining to be identified.

The reforms proposed by the government have sparked criticism from hardline members of the radical left ruling party Syriza, but most opposition parties have expressed willingness to back them.

“We should not lead the country to a Grexit, because we are completely unable to handle it and we should not cause more harm to our people”, he stressed.

Greece had voted “no” in last weekend’s referendum, he said, “and that will not be turned into a humiliating ‘yes.'”.

(AP Photo/Emilio Morenatti). A woman prepares corn cobs at her stall in front of the Greek Parliament as demonstrators gather during a rally in Athens, Thursday, July 9, 2015.

A small group of pensioners held a protest outside the finance ministry in Athens and an anti-austerity demonstration is planned for Friday evening.

Syriza had resisted a new loans-for-austerity deal, arguing the country is too weak to endure it, with a quarter of the labor force out of work and a growing number living in poverty.

The plan handed to eurozone partners by Prime Minister Alexis Tsipras’s administration just two hours before a midnight deadline will be submitted to lawmakers in Greece for a vote.

In return for the new package, the government said it would seek debt relief – a notion gaining ground internationally despite reluctance in Germany. Donald Tusk, who presides over meetings of European Union leaders, also has called for “realistic” debt relief for Greece.