Prime Minister Tsipras calls for fair deal for Greece in EU parliament

Greek Prime Minister Alexis Tsipras called in a speech to the European Parliament on Wednesday for a fair deal to keep his country in the euro zone, acknowledging Greece's own responsibility for its plight, after EU leaders gave him five days to come up with convincing reforms. The Greek government formally submitted a request for a three-year loan from the European Stability Mechanism bailout fund that would be used "to meet Greece's debt obligations and to ensure stability of the financial system". With its banks closed, cash withdrawals rationed and the economy in freefall, Greece has never been closer to a state bankruptcy that would probably force it to print an alternative currency and leave the euro. Yet the leftist premier seemed relaxed and confident, with a note of humility, when he appeared before EU lawmakers in Strasbourg to cheers and scattered boos. Speaking hours after euro zone leaders, at another emergency summit in Brussels, set Greece a deadline of the end of the week to come up with far-reaching reform proposals, Tsipras said Greeks had no choice but to demand a way out of "this impasse". "We are determined not to have a clash with Europe but to tackle head on the establishment in our own country and to change the mindset which will take us and the euro zone down," he said to applause from the left. He promised to deliver detailed reform proposals on Thursday and mostly avoided the angry rhetoric that has alienated many European partners, although he criticized attempts to "terrorize" Greeks into voting for "never-ending austerity". In its loan application letter, Athens promised to implement a set of tax and pension measures "as early as the beginning of next week", promising more details within 48 hours. Speaking before him, European Council President Donald Tusk repeated that the final deadline for Greece to submit convincing reform plans and start implementing them was this week. "Our inability to find an agreement may lead to the bankruptcy of Greece and the insolvency of its banking system," Tusk said. "And for sure it will be most painful for the Greek people. "I have no doubt that this will affect Europe, also in the geopolitical sense. If someone has any illusion that it will not, they are naive," he said. In the turbulent chamber, some lawmakers held up "Oxi" (No) signs to back Greek voters' rejection of more austerity, while far-right speakers praised the radical leftist government for standing up to what several called the European "oligarchy". TIMETABLE If experts from the European Commission, European Central Bank and International Monetary Fund deem the Greek proposals viable, euro zone finance ministers would meet on Saturday to recommend opening negotiations with Athens, and a special summit of the 28-nation EU would meet on Sunday to approve an aid plan. Before then, Greece is supposed to rush a first wave of measures through parliament, euro zone sources said, and German Chancellor Angela Merkel has said she would ask parliament in Berlin to authorize the opening of loan negotiations provided the Greek measures are deemed satisfactory. Euro zone sources said one key question is whether the Greek reform package will be more ambitious than the spending cuts, tax increases and modest reforms that Greek voters rejected on Sunday in a referendum on a previous bailout plan. "The numbers have to add up, and the numbers have become vastly more unfavorable since the banks were shut and the economy seized up in the last 10 days," one euro zone finance official said. Despite the last-minute efforts to conjure up a deal for Greece, a Reuters poll of economists found the probability of Greece leaving the euro zone had risen to 55 percent from 45 percent last week, the first time it has gone above half-way. Tsipras acknowledged his radical government's share of responsibility for what had gone wrong in its 5-1/2 months in office but said the bulk of Greece's problems lay in a failed austerity policy imposed over the last 5-1/2 years of crisis. He admitted that after winning power on a promise to end austerity, he had "spent more time negotiating than governing". He was also strongly critical of Greece's failings as a society, citing a history of clientelism, corruption, chronic tax evasion that had "run riot", inequality and "the nexus of political and economic power". While Athens has made strides since 2010 in turning around its public finances to post a budget surplus before debt service, it has lagged on implementing structural reforms. In particular, it has fallen far short of targets on privatizing state assets and struggled to improve tax collection and reform labor laws and a costly, fragmented pension system. The IMF in the past has demanded that Greece quickly implement a law allowing for collective dismissals since no such layoffs have been approved for 30 years. Creditors have also pushed to end anti-competitive restrictions in product markets that have kept prices high, such as preventing the sale of bread in convenience stores. "NOT EXAGGERATEDLY OPTIMISTIC" Merkel made clear at a midnight news conference that she was "not exaggeratedly optimistic" that a deal could be found to save Greece by Sunday. While European shares have lost nearly five percent in the last two days largely on concerns about a Greek collapse, sovereign bonds of the other weaker euro zone governments have held remarkably steady, buoyed partly by ECB bond-buying. A crash in Chinese stocks has been a bigger market factor than whether Europe would save Greece. US Treasury Secretary Jack Lew stepped up pressure from Washington for Greece and its partners to reach a deal that keeps Athens in the euro area for the sake of economic and geopolitical stability in Europe. A chorus of second-ranking politicians in Germany demanded that Greece finally be ejected from the euro zone, but Athens' supporters in France and Italy saw a glimmer of hope. Peter Ramsauer, deputy leader of Merkel's Bavarian CSU conservative allies, said Greece should leave and accused the Greek government of leading its partners by the nose "like dancing bears round the ring". It was incomprehensible how the country kept being given last chances, he complained. France's finance minister urged the Greek government to use the big mandate it won in Sunday's referendum to convince the population of the need for compromise with creditors. "Greek society maybe needed this renewed pride to reach the necessary compromises," Michel Sapin told reporters. Having secured a referendum victory and the unprecedented support of the five main parties in parliament, Tsipras also made clear he wanted to act fast to pre-empt any possible revolt against the painful concessions he will need to make. –Reuters