The Greek government on Thursday evening approved a package of specific reform measures it will present to foreign creditors in an effort to break an impasse that has raised questions about austerity and democracy across the European continent.
While details were not immediately made public, early news reports suggested the reform plan could include "punitive" measures such as at least €12 billion of cuts and tax increases—all in exchange for debt relief.
According to the Guardian:
Parliament is expected to endorse the package after a frantic few days of negotiation that followed a landmark referendum last Sunday in which Greek voters backed the radical leftist Syriza government’s call for debt relief.
Syriza, which is in coalition with the rightwing populist Independent party, is expected to meet huge opposition from within its own ranks and from trade unions and youth groups that viewed the referendum as a vote against any austerity.
Panagiotis Lafazanis, the energy minister and influential hard-leftist, who on Wednesday welcomed a deal for a new €2bn gas pipeline from Russia, has ruled out a new tough austerity package.
Lafazanis represents around 70 Syriza MPs who have previously taken a hard line against further austerity measures and could yet wreck any top-level agreement.
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As the Guardian's Helena Smith argued: "The irony has not been lost on anyone... that after the Greeks' resounding rejection of further biting austerity at the weekend, prime minister Alexis Tsipras has with lightning speed now agreed to put his name to the most punitive austerity package any government has been asked to implement during the five years of economic crisis in Greece."
Indeed, the UK's Telegraph adds that Prime Minister Alexis Tsipras "has now reportedly told his parliament to brace themselves for 'compromise'."
Still, "[t]he concession would allow Mr. Tsipras to sell the deal as a face-saving measure after the Greek people delivered a 'No' to the previous bail-out terms, which provided no explicit promise to debt relief," Telegraph journalist Mehreen Khan wrote on Thursday.
Tsipras and his Syriza government have long said that easing the country's debt would restore "dignity" to impoverished Greeks.
The new proposal will be studied on a technical level by the so-called Troika—the European Central Bank, the European Union, and the International Monetary Fund (IMF)—on Friday, followed by further discussions among Eurozone finance ministers on Saturday and a full EU summit on Sunday.
It is not yet clear how these stakeholders will respond to Greece's pitch. European Council president Donald Tusk said Thursday that any "realistic proposal from Athens needs to be matched by realistic proposal from creditors on debt sustainability to create [a] win-win situation"—suggesting he, like the IMF, supports the idea of debt relief.
But German Chancellor Angela Merkel, who was in Bosnia on Thursday, continues to rule out slashing the face value of Greece’s government debt, saying a so-called "haircut" on Greek loans was out of the question.
The BBC's Hugh Schofield argues that "at this dramatic juncture Greece looks to France as its last remaining hope."
As one by one other EU governments have accepted the likelihood of an impending Greek departure, France cleaves to the imperative of compromise.
On Wednesday, even as Mr Tsipras addressed the European Parliament in Strasbourg, Prime Minister Manuel Valls was telling a debate in the French National Assembly that keeping Greece in the EU was of "utmost geostrategic and geopolitical importance" and that a deal was "within grasp".
Reporting from Athens, the Guardian's Smith adds: "Officials here are saying that all hope now rests with the French connection. Paris has dispatched a team of technocrats to help finance minister Euclid Tsakalotos draft the new proposal in an effort to ensure it is as convincing as can possibly be."
Meanwhile, dueling rallies are slated to take place in Athens on Thursday and Friday, amidst ongoing negotiations between Greek officials and foreign creditors over debt relief and austerity, and ahead of the weekend meetings that could decide Greece's future in the Eurozone.
Declaring "We're staying in Europe," Greeks who favor a harsh, Troika-proposed bailout deal—albeit at the cost of more cuts and austerity—will converge outside Parliament at 7:30 pm local time on Thursday.
The following day—same time, same place—"No" supporters, who won a landslide victory in Sunday's referendum, will hold an anti-austerity rally under the slogan "Hands off democracy."
A Guardian analysis published Thursday offers an indication of who might be in attendance at each demonstration. The Guardian's interactive map shows that while last week's vote indeed reflected divisions between the old and young, it also split along class lines, with the nation's poor voting overwhelmingly against the austerity package, and rich people voting "Yes."