Greek offer to creditors runs into angry backlash at home

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 eurozone.

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.

“I believe that this programme as we see it … is difficult to pass by us,>> Deputy parliament speaker and Syriza lawmaker Alexis Mitropoulos told Greek Mega TV on a morning news show.

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.

> Mitropoulos said. >

But with Greece perilously close to bankruptcy, it remains unclear whether lawmakers would pull the rug from under Tsipras if he secures a deal.

DIFFICULTIES AHEAD There have been several false dawns in the negotiations.

Tsipras appeared to have reached an understanding with the creditors at the start of June, only to blast their demands as > in parliament.

> government spokesman Gabriel Sakellaridis told Mega TV.

Ahead of emergency talks on Monday in Brussels, Tsipras had spent hours with his cabinet in an apparent attempt to secure their backing.

> Pavlos Haikalis, a deputy with Syriza’s junior coalition partner, the Independent Greeks, told Antena TV.

European Council President Donald Tusk, who chaired an emergency summit of leaders of the 19-nation currency bloc, called the Greek proposals >. He said the aim was to have the Eurogroup finance ministers approve a reform package on Wednesday evening and put it to euro zone leaders for final endorsement on Thursday morning.

But German Chancellor Angela Merkel, whose country is Greece’s biggest creditor, was more cautious, saying there were no guarantees that a final agreement could be reached.

Greek newspapers on Tuesday saw a deal in sight but warned that, with the exact terms not finalized, the creditors could ask for tougher measures.

> Greek daily Ethnos said. >

One difficulty >