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A man carries a luggage in central Athens on July 11, 2015.(Photo: AP)
BRUSSELS — European finance ministers appeared skeptical of Greece's latest bailout plan<span style="color: Red;">*</span>Saturday at a meeting to discuss whether the eurozone and international creditors can back the beleaguered<span style="color: Red;">*</span>nation's proposal.
German Finance Minister Wolfgang Schauble<span style="color: Red;">*</span>suggested the new plan<span style="color: Red;">*</span>doesn't go far enough, saying Greece should take a "time out"<span style="color: Red;">*</span>from the eurozone for at least five years<span style="color: Red;">*</span>to get its financial house in order, German newspaper<span style="color: Red;">*</span>Frankfurter Allgemeine Sonntagszeitung<span style="color: Red;">*</span>reported.<span style="color: Red;">*</span>Schauble, a key player in the talks,<span style="color: Red;">*</span>predicted "exceptionally difficult negotiations."
The Eurogroup of finance ministers is trying to decide whether Greece's formal proposal is sufficient to secure Athens a third bailout and prevent it from leaving Europe's euro-currency bloc.
Under Schauble's approach,<span style="color: Red;">*</span>Greece would remain a member of the European Union while it restructures its debt, the German paper reported.
A German finance ministry position paper<span style="color: Red;">*</span>said Athens' latest plans "leaves out important central reform areas to modernize the country and to bring economic growth and sustainable development over the long term," FAS reported.<span style="color: Red;">*</span>In an alternative ministry proposal, the newspaper added, Greece would rapidly improve its proposals and transfer $56 billion of assets to a fund to pay down its debt. The German Finance Ministry declined to comment on the reports.
The tone was also guarded among ministers as they arrived for the critical<span style="color: Red;">*</span>Saturday meeting.<span style="color: Red;">*</span>"We are not there yet," said Dutch finance minister Jeroen Dijsselbloem, the eurozone's top official on the Greek bailout plan. "Both on substance and there is of course a major issue of trust. Difficult meeting."
Christine Lagarde, head of the International Monetary Fund, said before the talks got underway that<span style="color: Red;">*</span>"We have to make a lot more progress."
The emergency talks convened just hours after Greece's parliament approved a motion for pension cuts and tax increases that may pave the way for Athens to receive $59 billion over three years as it attempts to avert bankruptcy and a complete collapse of its banking system.
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Greek parliament approves new bailout proposal to avert bankruptcy
The new plan being reviewed by the 19 eurozone finance ministers alongside officials from the International Monetary Fund, European Central Bank and European Commission — Greece's creditors — resembles an offer made to Athens last week that was overwhelmingly rejected by Greek voters in a national referendum.
If an agreement is reached Saturday a planned summit in Brussels with all 28 leaders of the European Union for Sunday may not go ahead. However, Italian Finance Minister Pier Carlo Padoan downplayed expectations a deal could be reached Saturday, saying the meeting was "not about striking a deal tonight."
Some of Greece's creditors have indicated the new plan is a promising basis for re-starting talks, but Athens' lenders have already lent the nation nearly a quarter-trillion dollars since 2010 and patience in some quarters, led by Germany, with Prime Minister Alexis Tsipras' leftist Syriza party is running out after a series of twists and turns in the negotiation process that has dragged on for months.
Global markets bounded higher Friday on expectations a last-minute deal would be reached. The Dow closed up 212 points. Germany's DAX index finished 2.9% higher.
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Moody's nevertheless estimated Greece's banks could run out of money by Sunday and that even if some kind of deal is reached this weekend, the country— with huge deficits and a 25% jobless rate — faces a long road back to financial stabilization.
"Regardless of a political agreement on Greece this weekend, we believe that implementation risks will still remain high and the conditions under which external finance is provided will be harder to absorb because of the political and social challenges in the country," the credit firm said in a note sent to investors on Friday.
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Greeks react to new bailout package with resignation, relief
Contributing: Jessica Estepa
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