With its banks closed, cash withdrawals rationed and the
economy in freefall, Greece has never been closer to a total
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 peers, at another emergency summit in Brussels, set Greece a deadline of the end of the week to come up with convincing 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 in the next 48 hours and mostly eschewed the angry rhetoric that has alienated many European partners, although he criticized attempts to "terrorize" Greeks into voting for "never-ending austerity".
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.
Some EU lawmakers held up "Oxi" (No) signs to back Greek voters' rejection of more austerity.
Under a timetable agreed at Wednesday's second emergency euro zone summit in less than two weeks, Greece will submit a formal application for a medium-term loan program from the European Stability Mechanism bailout fund on Wednesday, along with a first reform program, to be detailed on Thursday.
If experts from the European Commission, European Central Bank and International Monetary Fund deem the 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 reform 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.
NUMBERS IN DOUBT
Euro zone sources said the 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.
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 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.
