Deal with lenders seen within week after euro summit

Eurozone leaders were locked in talks in Brussels late on Monday after Eurogroup officials suggested that an agreement could be reached this week on the basis of new economic proposals tabled by the Greek government.

Greece’s proposal foresees raising revenue from savings in the area of pensions and increases in taxes in addition to a range of economic measures that have been discussed over the past weeks with creditors.

Arriving at the Brussels summit, Prime Minister Alexis Tsipras appeared upbeat from early in the day. “I think this is time for a substantial and viable solution that would allow Greece to come back to growth within the eurozone,” he said.

Earlier in the day various European politicians offered radically different points of view on the contents of the Greek proposal. German Finance Minister Wolfgang Schaeuble indicated that, in his view, there had been no real progress since last Thursday’s Eurogroup. Finland’s Prime Minister Alexander Stubb was scathing too, noting that European ministers and leaders had “wasted air miles” in traveling to Brussels. European Economic and Monetary Affairs Commissioner Pierre Moscovici and French President Francois Hollande were typically more upbeat about the prospects for progress.

Finally, after a relatively short Eurogroup meeting, President Jeroen Dijsselbloem told a press conference that Greece’s proposal was indeed a “positive step in the process” and “welcome.” He said the proposal appeared to be “broad and comprehensive” and that it could be a “basis to really restart the talks.”

As technical-level talks in Brussels got under way, European Commission President Jean-Claude Juncker indicated after talks with Tsipras that he was gearing up for a deal by the end of the week but was cautious. “We have made progress over the last few days, but we are not yet there,” he said.

European Council President Donald Tusk, who called the summit in a stern message delivered by video last Friday, struck a notably brighter tone on Monday. “The latest Greek proposals are the first real proposals in many weeks although they still need… the assessment of the institutions and further work of course,” he said. “The most important thing is that the leaders take full political responsibility for the political process to avoid the worst-case scenario, which means uncontrollable, chaotic Grexident.”

German Chancellor Angela Merkel, who faces strong resistance on the domestic front to providing further aid to Greece, was more cautious than Tusk on her arrival in Brussels. “After the Eurogroup meeting there is no basis for a decision, so this can only be an advisory summit,” she said.

Prior to the summit, US Treasury Secretary Jack Lew urged Tsipras in a phone call to make a “serious move” toward reaching a deal with Greece’s creditors to avert “immediate hardship for Greece and uncertainties for Europe and the global economy.”