Greek deal possible, but not just yet, says top EU official

The Eurozone's top official Jeroen Dijsselbloem has called a new debt proposal by Greece "a welcome step and a step in the right direction," but said he doesn't expect a bailout deal today.

The Greek deal is "broad and comprehensive," he said, but EU ministers need to study the details before reaching an agreement, Dijsselbloem said in a news conference after a meeting of finance ministers.

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He confirmed an EU summit will go ahead this afternoon, but said a deal was more likely later in the week after working out technical details.He said officials will not negotiate further with Greece today.

"The summit is for Greek Prime Minister Alexis Tsipras toaccept the sequence of events, to hear ...that an agreement hasfirst to be reached at a technical level and then accepted bythe Eurogroup," an EU official told Reuters.

Greece presents a package

Greek Prime Minister Alexis Tsipras presented the leaders of Germany, France and the European Union over the weekend with a proposal for what he called "a mutually beneficial agreement, which will provide a permanent solution."

Greece has to pay 1.6 billion euros ($2.2billion Cdn) as a loan paymentto the IMF on June 30. It cannot afford that without a deal that would unlock the remaining cash in its bailout fund, about 7.2 billion euros ($10.02billion Cdn).

After five months of talks, its relations with the EU were souring and EU countries have begun preparing for Greece to exit the euro.

The contents of the new offer have not yet been officially divulged, but Greek officials say it acquiesces to some of the demands from Greece's EU and IMF lenders for tax hikes, curbing early retirement and other spending cuts to ensure Athens hitsbudget targets.

In Brussels, European Union officials said Greece is offering to raise the retirement age gradually to 67.

BBC released further details, quoting Greek economy minister Giorgos Stathakis.

New taxes in Greece

Among the ways the country intends to raise more money.

• A new tax on businesses.
• A new tax on the wealthy.
• Some increases in the VAT rate on selected items.

However Tsipras has offered no further reductions in pensions or public-sector wages.

TheAthens stock market, which had lost much of its strong gains on the news that there has been no definitive deal at a meeting on Monday, rebounded on the positive comments. It closed 9 per cent higher. The Stoxx 50 index of top European shares was somewhat less volatile and closed 4.1 per cent higher

Money continues to pour out of Greek banks as savers worry the country may have to quit the euro. About four billion euro($5.5 billion Cdn)has been withdrawn in the past week.

A debt default by Greece could destabilize its banksand could in a worst case scenario cause the country to have to leave the euro.

That would be hugely painful for Greeks but experts are more divided about its effects on Europe and the world economy. Several European countries have said publicly they are getting prepared for the possibility.