ATHENS, greece — Greece on Thursday finally met a deadline that counted and made a series of sweeping proposals that its creditors needed by midnight to set off a mad rush toward a weekend deal to stave off a financial collapse of the nation.
The package of reforms raised hopes that Greece can get a rescue deal that will prevent a catastrophic exit from the euro after key creditors said they were open to discussing how to ease the country’s debt load, a longtime sticking point in their talks.
In a significant about-face, the government caved in to demands for a new round of austerity measures, including sales-tax increases and cuts in state spending for pensions that the left-leaning Greek government had long resisted.
In the text of proposals sent by Athens late Thursday, the government conceded to demands it had previously refused to accept — mostly on moving various categories of goods and services to higher sales-tax rates — in exchange for a new 53.5 billion euro, or $59 billion, bailout package.
Many of the proposed reforms were harsher than those roundly rejected by the Greek public in a bailout referendum Sunday. But the government said, in return, it “would seek a commitment from creditors to negotiate … further measures to restructure the long-term debt.”
The government scheduled an emergency vote in Parliament late Friday to win backing for the belt-tightening plan and said it thought it had the support needed for an endorsement.
After months of foot-dragging despite impending chaos, Greek Prime Minister Alexis Tsipras met a midnight deadline with more than an hour to spare. The spokesman for eurogroup President Jeroen Dijsselbloem tweeted it was “important for institutions to consider these (proposals) in their assessment” of the Greek situation.
Finance officials from the European institutions and the International Monetary Fund were to fine-comb through the proposals Friday before the 19 eurozone finance ministers assess them Saturday. In ideal circumstances, a summit of the full European Union would be able to approve them Sunday.
Earlier Thursday, Donald Tusk of Poland, who is chairman of the EU summits, indicated that European officials would make an effort to address Greece’s key request for debt relief.
“The realistic proposal from Greece will have to be matched by an equally realistic proposal on debt sustainability from the creditors,” Tusk said. “Only then will we have a win-win situation.”
Greece has long argued its debt is too high to be paid back and that the country requires some form of debt relief. The IMF agrees with the premise, but key European states such as Germany have resisted the idea.
On Thursday, German Finance Minister Wolfgang Schaeuble said the possibility of some kind of debt relief would be discussed over coming days, although he cautioned it might not provide much help.
Making Greece’s debt more sustainable would probably involve lowering the interest rates and extending the repayment dates on its bailout loans. Germany and many other European countries rule out an outright debt cut, arguing it would be illegal under European treaties.
The last-minute maneuvers come as Greece’s financial system teeters on the brink of collapse. It has imposed restrictions on banking transactions since June 29, limiting cash withdrawals to 60 euro per day to staunch a bank run.
