(MENAFN- Khaleej Times) Greece's new anti-austerity government submitted a preliminary list of reform proposals to Brussels on Monday in a bid to secure a four-month extension to its lifeline debt bailout, a European source said.
If the measures fail to win the approval of Greece's EU creditors, the country's safety net will collapse on Saturday leaving the government at risk of running out of cash, a run on banks and even a eurozone exit.
But hard-left Prime Minister Alexis Tsipras, whose Syriza party swept to power in elections last month, could also face a voter backlash if he fails to deliver on promises to ease the pain of ordinary Greeks after years of swingeing government spending cuts.
The very list: Greece seeks bailout extension with reform proposals
In the latest in a series of dramatic showdowns over Greece's ‚¬240 billion ($270-billion) bailout, flamboyant new Finance Minister Yanis Varoufakis secured the extension from his 18 fellow eurozone partners in Brussels on Friday.
The tentative agreement boosted global markets as fears eased of a "Grexit" or eurozone exit - which could have highly damaging wider ramifications - and stocks mostly rose in Asia and Europe.
The deal, however, came with the proviso that Athens provide by Monday a list of measures to quash concerns, not least in powerhouse Germany, that Greece might backtrack on its commitments to cut spending and pass root-and-branch reforms.
"Europe has some breathing space, nothing more, and certainly not a resolution," German Foreign Minister Frank-Walter Steinmeier told the Bild daily on Monday.
"The fundamentals - namely assistance in exchange for reform - must remain the same."
EU Economic Affairs Commissioner Pierre Moscovici told France 2 television that Greece's proposed reforms had to be "realistic".
"Of course there will be measures that fit with the philosophy of Syriza... but they also have to take account of budgetary balance and the need to repay debts," he said.
In Berlin, a finance ministry spokesman said the list needed to be "coherent and plausible".
Tsipras, 40, has vowed to end the "humiliation" and "vicious circle" of the spending cuts demanded by Greece's creditors in return for two massive bailouts since 2010. He wants to use the next four months to draw up a new reform package that puts the country - where one in four people is out of work - on a fairer road to recovery after years of recession, spending cuts and state job losses.
But the tough negotiating stance of Germany and other eurozone countries has obliged the former student radical and his tieless finance minister Varoufakis, 53, to give ground.
Athens pledged to refrain from one-sided measures that could compromise fiscal targets and had to abandon plans to tap some ‚¬11 billion in leftover European bank support funds.
UniCredit economist Erik Nielsen called it a "complete political surrender to the world of reality", saying that it was clear that Europe has "drawn the line in the sand".
Tsipras insisted at the weekend that his coalition government had achieved an "important negotiating success" which "cancels out austerity".
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