Greek MPs are to debate new proposals sent to the country’s creditors with the aim of getting a third bailout and averting a possible exit from the euro.
The plans contain elements, including pension reforms and tax rises, that were rejected in a referendum called by Prime Minister Alexis Tsipras.
The EU and other creditors are studying the plans before a summit on Sunday.
France and Italy welcomed the proposals but Germany, Greece’s biggest creditor, warned of little room for compromise.
With Greece’s banks running out of money and its economy facing implosion, this weekend brings a series of emergency talks over the debt crisis.
On Saturday, eurozone finance ministers meet under the Eurogroup – a forum for discussing monetary policy – to address the Greek plans.
A meeting of eurozone heads of government is scheduled for Sunday afternoon, followed by a full EU summit two hours later.
Greece in numbers
Greece’s debt mountain
177% country’s debt-to-GDP ratio
25% fall in GDP since 2010
26% Greek unemployment rate
EU leaders seem divided over the Greek proposals so far.
- German finance ministry spokesman Martin Jaeger said Germany saw “very little leeway in terms of restructuring, [or] reprofiling [Greece’s debt]”, and would not accept any reduction in debt that caused Germany more losses. He said Finance Minister Wolfgang Schaeuble remained “sceptical”
- Italian Prime Minister Matteo Renzi said he was optimistic and hoped a deal could be struck as soon as Saturday
- French President Francois Hollande said the new proposals were “serious and credible” and that the “Greeks have just shown their determination to remain in the eurozone”
- Eurogroup head Jeroen Dijsselbloem said the Greek proposals were “thorough” – but warned they would have to be fully reviewed.
If approved, the proposals must also be ratified by parliaments in several EU member states, where they may be challenged.
Analysis: Robert Peston, BBC economics editor
Only a few days ago Mr Tsipras won an overwhelming mandate from the Greek people, in a referendum, to reject more-or-less these bailout terms.
And today, on the back of that popular vote, he is signing up to the supposedly hated bailout. This is big politics that would make Lewis Carroll proud.
But here’s the point. If a way isn’t found to allow the banks to reopen within days – and the ECB simply maintaining Emergency Liquidity Assistance won’t come anywhere near to achieving that – the Greek economy will implode so that any bailout deal agreed this weekend will become irrelevant in weeks.
Angela Merkel under pressure over Greek bailout deal
Meanwhile, the plans face possible opposition in Greece for having embraced many of the austerity measures rejected at a referendum last Sunday.
Parliament is debating and then voting on the plans on Friday evening.
The language of debt
Haircut: A reduction – or writedown – in the value of a troubled borrower’s debts. In 2011, Greece’s private lenders received a massive 50% haircut of what they were owed. At this stage the Greeks are being careful not to ask for debt haircuts.
Debt restructuring or rescheduling: Altering the terms of a loan in order to extend the repayment period. It may also mean dismissing part of the money owed. US Treasury Secretary Jacob Lew has said Greece’s creditors should restructure the country’s debt, but that such a move would not necessarily mean writing off a part of what Greece owes them. The IMF’s boss Christine Lagarde has also said Greece needs debt restructuring.
Debt relief: The forgiveness of part or all of a debt (a “haircut”), or the temporary suspension of repayments on the existing debt. The IMF Chief Economist Olivier Blanchard has said any Greek deal should include debt relief.
How easy is it to swap currencies?
A spokesman for Mr Tsipras’ Syriza party said he was confident MPs would give the government the mandate to negotiate the new bailout package.
The coalition government has 162 seats in the 300-strong parliament, and also has the backing of many opposition MPs.
However, the BBC’s Mark Lowen in Athens says that Mr Tsipras has made a major climb-down.
Mr Tsipras has asked eurozone and other creditors for €53.5bn ($59.47bn) to cover Greece’s debts until 2018.
He submitted the proposals to Greece’s creditors – the European Commission, the European Central Bank and the International Monetary Fund – by the Thursday deadline they had set.
The measures submitted in the new Greek document include:
- tax rise on shipping companies
- unifying VAT rates at standard 23%, including restaurants and catering
- phasing out solidarity grant for pensioners by 2019
- €300m ($332m; £216m) defence spending cuts by 2016
- privatisation of ports and sell-off of remaining shares in telecoms giant OTE
- scrapping 30% tax break for wealthiest islands
Greece’s creditors have already provided more than €200bn in two bailouts since a rescue plan began five years ago. The second bailout expired on 30 June.
Greece’s banks are still closed and the €60 (£43; $66) daily limit on cash machine withdrawals for Greeks, imposed on 28 June, remains in force. With a shortage of €20 notes, for many the limit is in effect €50.
- 10 July: Greek parliament vote. ECB, EU and IMF discuss proposals at technical level
- 11 July: Eurozone finance ministers discuss plans (Brussels 13:00 GMT)
- 12 July: Eurogroup leaders meet (14:00 GMT) followed by summit of all 28 members of the European Union (16:00 GMT). Both Brussels
- 20 July: €3bn payment due from Greece to the European Central Bank