Greece's Tsipras to sell last-ditch austerity deal proposal to reluctant party

Economic Indicators Associated Press

Greece's left-wing Prime Minister Alexis Tsipras will seek backing for a harsh new austerity package from his party Friday to keep his country in the euro — less than a week after urging Greeks to reject milder cuts in a referendum.

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Government ministers signed off on the sweeping new measures — likely to extend the recession after six years of painful decline — that include pension cuts and tax hikes.

The proposals were sent to rescue creditors for approval at emergency meetings of European Union leaders and finance ministers over the weekend. The proposed new bailout worth nearly $60 billion would be Greece's third since it lost market access in 2010.

But Tsipras must first get authorization from parliament in a vote Friday, asking his Syriza party to sign off on the U-turn despite more than 60 percent of voters opposing more austerity in the July 5 referendum.

The coalition government has 162 seats in the 300-member parliament and pledged backing on a deal from a large section of opposition lawmakers. But failure to deliver votes from his own government would likely topple his coalition.

A prominent dissenter, Energy Minister Panagiotis Lafazanis, urged the government not to sign a third bailout.

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"The choices we have are tough ... but the worst, the most humiliating and unbearable choice is an agreement that will surrender, loot and subjugate our people and this country," he told a business conference.

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

Protesters who had backed a "yes" vote returned to the streets Thursday, with several thousand gathering outside parliament.

More rallies, backing and opposing the government, are planned in central Athens on Friday.

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

Athens finally issued its proposals late Thursday, just ahead of a deadline set by eurozone lenders — forced to make more concessions after defaulting on repayments to the International Monetary Fund and being forced to close its banks to prevent their collapse.

In return for the new package, the government said it would seek debt relief — a notion gaining ground internationally despite reluctance in Germany.

"The realistic proposal from Greece will have to be matched by an equally realistic proposal on debt sustainability from the creditors. Only then will we have a win-win situation," European Council President Donald Tusk said.

On Thursday, German Finance Minister Wolfgang Schaeuble also said the possibility of some kind of debt relief would be discussed over coming days.

But in a note of caution, he added: "The room for maneuver through debt reprofiling or restructuring is very small."

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