Greek lawmakers reacted angrily on Tuesday to concessions Athens offered in debt talks and parliament’s deputy speaker warned the proposals would struggle to win approval, puncturing optimism that a deal to lift Greece out of crisis might be quickly sealed.
European leaders on Monday welcomed the new budget proposals from Athens as a basis for a possible agreement to unlock frozen aid and avert a default that could trigger a Greek exit from the euro-zone.
Stock markets also welcomed the plan, with European shares extending the previous session’s sharp rally and climbing to a three-week high on Tuesday, with growing expectations that Greece was getting closer to striking a deal.
But Prime Minister Alexis Tsipras, who was voted into office in January on a pledge to roll back years of austerity in a country battered by recession, must keep his leftist Syriza party as well as his creditors onside for a deal to stick.
If parliament does fail to back the latest offer, which included higher taxes and welfare changes and steps to curtail early retirement, Tsipras might be forced to call a snap election or a referendum that would prolong the uncertainty.
Athens urgently needs money to avoid defaulting next week on a 1.6-billion-euro loan to the International Monetary Fund, while jitters over the health of Greece’s banks have prompted savers to pull billions of euros out of their accounts.
The European Central Bank raised the ceiling on emergency liquidity Greek banks can draw from the country’s central bank for a second time in two days on Tuesday, a banking source told Reuters, declining to say by how much.
But with Greece perilously close to bankruptcy, it remains unclear whether lawmakers would pull the rug from under Tsipras if he secures a deal.
