EU, IMF give thumbs up to Greek bailout request: source

The Greek government has sent a package of reform proposals to its euro zone creditors in a race to win new funds.

Greek Prime Minister Alexis Tsipras delivers his speech as he attends a parliamentary session in Athens on Friday. Mr. Tsipras appealed to his party's lawmakers on Friday to back a tough reforms package after abruptly offering last-minute concessions to try to save the country from financial meltdown.

E.U. and IMF officials have given euro zone governments a positive assessment of Greece’s request for a new bailout, a source close to the matter said, making it likely they will agree on Saturday to open talks on lending Athens tens of billions of additional euros.

Experts from the European Commission, European Central Bank and the International Monetary Fund spent Friday reviewing the Greek case for aid and proposals for economic reforms from Prime Minister Alexis Tsipras that will be conditions for any loans.

The positive evaluation, along with a conclusion that Athens currently needs some €74 billion to meet its obligations, will form a key part of discussions among euro zone Finance Ministers when they meet in Brussels.

With Greek banks shut and subject to capital controls for the past week, failure to agree a new programme following five months of abortive negotiations had threatened effectively to force Greece out of the 19-state currency area, alarming E.U. leaders who have scheduled an emergency summit for Sunday.

One euro zone source, who has been sceptical of the leftist government’s commitment to a new reform programme, said it was now “100 per cent certain” the Ministers would agree to launch negotiations. In the meantime, they will also consider short-term aid to tide Athens over until the three-year loan deal that Mr. Tsipras requested has been agreed and funds can be disbursed.

Euro zone officials also expect to discuss Greek requests for some of its outstanding debt, currently worth some 175 per cent of its GDP, to be rescheduled, although the creditor governments insist they cannot legally write any off entirely.

Germany, which has contributed more to the previous two Greek bailouts since 2010 than any other country, sounded wary on Friday after Mr. Tsipras submitted proposals broadly similar to terms that Greek voters rejected in a referendum last Sunday.

But France, Greece’s strongest supporter among the euro zone’s major powers, rushed to offer praise. President Francois Hollande called the offer of reforms “serious and credible”.

Dutch Finance Minister Jeroen Dijsselbloem, who chairs the Eurogroup of his euro zone peers and also the board of the European Stability Mechanism, which would provide any loans to Greece, described Mr. Tsipras’s proposals as a “thorough piece of text” but he declined to go into specifics on Friday.

Elected in January to end the austerity that has accompanied previous rescue programmes, Mr. Tsipras sought parliamentary backing for a new deal in a debate that continued into the early hours of Saturday. The vast majority of Greeks want to keep the euro.

The Greek government sent a package of reform proposals to its euro zone creditors on Thursday in a race to win new funds to avert bankruptcy and will seek a parliamentary vote on Friday to endorse immediate actions.