Greece Submits Harsher Austerity Proposal in Last-Ditch Effort to Remain in Eurozone

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Supporters of 'No' in Greek austerity referendum rally in Athens
People rally in front of the Greek parliament following the referendum on July 5, 2015. Photo: Anadolu Agency/2015 Anadolu Agency

After showing up to a meeting empty-handed earlier this week, Greece managed to make its Thursday night deadline to submit a formal proposal for economic reforms it will enact in return for a third round of bailout money from the rest of the EU. While Greek voters overwhelmingly rejected the terms proposed by the nation’s creditors in a vote last Sunday, the 13-page proposal includes even harsher austerity measures. Greece said it aims to increase revenue by about 1 percent of GDP annually over the next several years by raising taxes, overhauling the pension system, and implementing various other reforms. In return, Greece would get a €53.5 billion ($59 billion) bailout package that would enable it to reopen its banks and remain in the eurozone.

Greece has also been pushing for debt relief, and on Thursday European Council president Donald Tusk signaled that will be part of the talks set to take place over the next three days.

That may mean EU nations will be more open to lowering interest rates and extending repayment dates, but German chancellor Angela Merkel said “a classic haircut,” meaning simply reducing the debt, is still out of the question.

EU leaders will meet throughout the weekend to make one last attempt to hash out a deal. If they can’t reach an agreement by Sunday, Greece will finally be forced out of the eurozone. “I have no doubt that this is the most critical moment in our history,” Tusk said.