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Alexis Tsipras

Greece pushes new proposals for debt deal

Kim Hjelmgaard
USA TODAY
Protesters attend an anti-austerity, pro-government rally in front of the parliament building on June 21, 2015, in Athens.

Athens put forth new proposals Monday aimed at breaking a five-month deadlock with its international creditors over a debt crisis that could see Greece dramatically crash out of the euro-currency bloc.

Few details were available, but Greek Prime Minister Alexis Tsipras' office said he presented European leaders, including German Chancellor Angela Merkel, with a proposal "for a mutually beneficial agreement, which will provide a permanent solution."

Martin Selmayr, a senior aide to Jean-Claude Juncker, the European Commission's president, wrote in a Twitter post early Monday that the proposals by Tsipras' government were a "good basis for progress."

The potentially significant development comes as European leaders prepared to hold an emergency summit in Brussels that could last late into the night Monday as both sides seek a way out of the stalemate.

A final agreement, if it comes, may come toward the end of the week, Eurogroup President Jeroen Dijsselbloem, who heads the group of eurozone finance ministers, said in a news conference ahead of the talks with Europe's leaders.

Dijsselbloem said the new proposals from Greece were a positive step that could lead to a deal, although he did not say a deal would happen. However, Giorgos Stathakis, Greece's economy minister, told the BBC that he expected eurozone governments to confirm later Monday that the broad outlines of a deal had been agreed upon, paving the way for vital funds for Greece.

Athens has until June 30 to make a $1.8 billion loan repayment to the International Monetary Fund. Alongside the European Central Bank and European Commission, the IMF is one of the creditors behind a $270 billion aid package to Greece that was made, starting in 2010, in return for enacting austerity measures and economic reforms.

But due to a disagreement over the speed and nature of the implementation of labor market reforms and as well as cuts to politically sensitive areas, such as pensions, Greece has not received any of the final $8 billion tranche of loans from its creditors since last year. Monday's summit is seen as a last-ditch effort to reach a deal that would unlock those funds and avert the crisis.

If no last-minute deal is reached, experts fear the debt-stricken country could default on its loans and plunge anew into a financial crisis that could lead to its exit from the 19-nation, euro-currency bloc.

Further, under a worse-case scenario, analysts say that exit could also see Greece eventually forced out of the larger, 28-nation European Union political alliance.

Global markets Monday nonetheless surged on hopes of a breakthrough.

In Europe, Greece's Athex composite index rose 9% and Germany's DAX stock index advanced over 3%. Stocks in Paris also rose about 3%.

It was not immediately clear what concessions were being offered by Greece or its creditors, but negotiations in recent days have focused around changes to Greece's pension and tax system.

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