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 In exchange, Athens asked for a 29 billion euro loan to cover all
its debt service payments due in the next two years.
In the letter, seen by Reuters, Tsipras asked to keep a discount on
value added tax for Greek islands, stretch out defense spending cuts
and delay the phasing out of an income supplement to poorer
pensioners.
"As you will note, our amendments are concrete and they fully
respect the robustness and credibility of the design of the overall
program," the leftist Greek leader wrote.
Euro zone finance ministers were due to discuss the Greek request on
a conference call at 1530 GMT (11:30 a.m. EDT), but the initial
reaction from ministers and senior officials was that the letter
contained elements that ministers would find hard to accept.
German Chancellor Angela Merkel said Greece had not fulfilled its
obligations but the door for negotiations remained open.
With long queues forming at bank machines a day after Greece became
the first advanced economy to default on the IMF, and signs that
supplies of bank notes were running low, Tsipras has been under
growing political pressure to reach a deal.
Although his letter was dated June 30, it arrived after the 19
Eurogroup ministers had ended a conference call on Tuesday evening.
An EU official said it had been received around midnight, when the
country's international bailout expired when it defaulted on an IMF
repayment.
"The Hellenic Republic is prepared to accept this Staff Level
Agreement subject to the following amendments, additions or
clarifications, as part of an extension of the expiring EFSF program
and the new ESM Loan Agreement for which a request was submitted
today," Tsipras wrote.
However German Finance Minister Wolfgang Schaeuble poured cold water
on hopes of a rapid breakthrough, saying the letter had come too
late and it was still not clear what Greece wanted.
"That did not provide further clarity," he said, adding that there
was "no basis" for serious negotiations with Athens at the moment.
Any talks on a new program would have to start from scratch with
different conditions, he told a news conference in Berlin.
PENSIONERS SUFFERING
With events moving quickly, it was unclear whether a referendum on
the bailout terms, planned for Sunday, would still go ahead after
Finance Minister Yanis Varoufakis indicated on Tuesday that it might
be scrapped if a deal could be reached.
On the third day since banks were shut, long queues formed at bank
machines to take out cash, but even at a withdrawal limit of 60
euros a day. Bankers said there were already signs that 50-euro and
20-euro bank notes were running low.
Around 1,000 banks around the country also opened to allow
pensioners to withdraw a limited sums, a move made necessary by the
fact that many older people in Greece do not have credit or debit
cards.
Kiki Rizopoulou, a 79 year-old pensioner from Lamia in central
Greece had to travel to Athens to collect her pension, spending 20
euros of the 120 euros she was allowed to take out.
"I already have to pay back 50 euros that I owe. It's embarrassing,"
she said.
Advertising signs from the ruling Syriza party supporting the "No"
appeared in Athens but the hardship facing pensioners added to the
pressure facing Tsipras, who has indicated he will resign if he
loses the referendum.
The Tsipras letter contained only a single sketchy reference to
labor market reform, which was one of the creditors' key demands to
make the Greek economy more competitive.
"The new framework will be legislated in autumn 2015," it said
without saying what measures it contained. Tsipras' leftist
government wants to restore collective bargaining rights scrapped
under previous bailout-driven reforms, and opposes a demand to make
collective layoffs easier in the private sector.
Tsipras did agree to implement immediately a range of measures
recommended by the Organization for Economic Cooperation and
Development to make it easier to do business and open up closed
business sectors.
The letter made no mention of privatizations, which the Tsipras
government halted on taking office and which remain a bone of
contention.
An opinion poll showed opposition to the bailout in the lead but
also that the gap had narrowed significantly as the impact of the
government's move to shut the banks and impose capital controls
began to bite.
SCEPTICISM
European financial markets have remained remarkably calm this week
in the light of Greece's upcoming referendum, IMF default and
heightened concerns about Athens sliding out the euro.
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The euro currency has barely moved. After a rocky start to the week,
euro blue chip stocks are down less 2 percent since Friday. And,
crucially, government borrowing costs in the other highly indebted
southern euro nations of Portugal, Spain and Italy rose only modest
and briefly and remain roughly where they were a month ago.
The lack of panic or contagion to other euro markets stands in
marked contrast to 2011, when the Greek crisis was perceived as a
threat to the future of the single currency.
And this lack of overspill has emboldened the more hawkish of
Greece's sovereign creditors, including those in Berlin, who insist
Greece had been effectively ringfenced by a host of financial
buffers and its fate would not undermine the integrity of the euro
in the same way it did four years ago.
"Even if Greece were to leave the eurozone, its economy represents
only a small percentage of the eurozone’s gross domestic product,
less than 2 percent, and a lot of firewalls have been built in
Europe to try to minimize contagion among other euro area
countries," said David Zahn, head of European Fixed Income at U.S.
asset manager Franklin Templeton.
French Finance Minister Michel Sapin, who has been Greece's
strongest sympathizer in the euro zone, told RTL radio: "The aim is
to find an agreement before the referendum if possible... But it's
dreadfully complicated."
The ECB's policymaking governing council was to meet in Frankfurt to
decide whether to maintain, increase or curtail emergency lending
that is keeping Greek banks afloat despite a wave of deposit
withdrawals and the state's default.
Germany's Bundesbank was leading hawks who argue that the ECB cannot
go on providing funds through the Greek central bank as before to
lenders that are backed by an insolvent sovereign.
One possible move would be to increase the "haircut" charged on
Greek government bonds presented as collateral for funds in light of
the IMF default.
Schaeuble, who has taken a hard line on Greece, took the unusual
step of telling lawmakers he would advise the ECB not to raise
liquidity to Greek banks, according to participants at a closed-door
meeting. Berlin normally insists the central bank is independent and
should not receive advice from politicians.
After Athens's peers rejected a last-ditch plea for an extension of
its expiring bailout program on Tuesday evening, Eurogroup chairman
Jeroen Dijsselbloem said Greece was welcome to ask for new aid but
it would come with conditions.
"What can change is the political stance of the Greek government
that has led to this unfortunate situation," Dijsselbloem told
Reuters.
Thousands of pro-European Greeks took to Athens' central Syntagma
Square outside parliament on Tuesday evening to demand a "yes" vote
to the bailout deal.
Carrying signs with messages like "We will not become the last
Soviet state" and chanting "Greece! Europe! Democracy!", the
demonstrators braved heavy rain to rally in support of a "Yes" vote.
The demonstration matched a rally of similar size for the "No" camp
a day earlier, as supporters of both sides sought to build up
momentum before Sunday's referendum.
A poll by the ProRata institute published in the Efimerida ton
Syntakton newspaper showed 54 percent of those planning to vote
would oppose the bailout against 33 percent in favor.
However a breakdown of results between those polled before and after
Sunday's decision to close the banks and impose capital controls
showed the gap narrowing.
Of those polled before the announcement of the bank closures, 57
percent said they would vote "No" against 30 percent who would vote
"Yes". However among those polled after, the "No" camp fell to 46
percent against 37 percent for "Yes".
(Additional reporting by Lefteris Karagiannopoulos, Mike Dolan;
Writing by Paul Taylor; editing by Anna Willard and Philippa
Fletcher)
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