Greek PM confident of loan support as EU states scrutinise bailout

Greek Prime Minister Alexis Tsipras on Wednesday said he was confident his debt-crippled nation would secure loan support from a third international bailout heading for parliamentary approval this week.

"I am and remain confident that we will succeed in reaching a deal and in loan support (from the European Stability Mechanism)... that will end economic uncertainty," Tsipras said, adding that certain EU states had a "hidden plan to reshape the eurozone using Greece as the excuse" that would fail.

"Greece will not give them the excuse," the 41-year-old premier said in an apparent swipe at Germany, which on Wednesday said it needed more time to comb through the 400-page text setting out the fiscal and other policy measures Greece must take in exchange for the lifeline.

The European Commission earlier noted that the text had been finalised and submitted to EU member states for evaluation.

"All the last details have been clarified... What we were mandated to do is now concluded. We have now reached the finalised memorandum," commission spokeswoman Annika Breidthardt said in Brussels.

"The political process is now starting... Finance ministers are due to assess the agreement," she said.

Separately, EU sources said Greece will tumble back into deep recession this year and the next.

The Greek economy, which crawled out of a six-year recession only in 2014, will shrink 2.3 percent in 2015 and another 1.3 percent in 2016, the sources said.

Growth should then return, running at 2.7 percent in 2017 and 3.1 percent in 2018, they said.

Greece has repeatedly complained that the austerity measures demanded by its creditors -- the EU, the European Central Bank and the International Monetary Fund -- in return for two previous bailouts have only hurt an economy that has contracted by a quarter since the crisis broke.

The latest rescue package calls for a gas market overhaul, ends most early retirement schemes, eliminates fuel price benefits for farmers and raises some taxes, among other measures.

The government said Greek banks -- which were forced to shut down for three weeks as panicked customers withdrew billions of euros, fearing for the safety of their deposits -- would immediately receive 10 billion euros from the package, and will be fully recapitalised by the end of the year.

Greece and its creditors are under pressure to finalise the deal by next Thursday when Athens must repay some 3.4 billion euros to the ECB.

The draft deal comes after months of acrimonious negotiations between the creditors and Greece's left-wing government, which came to power in January promising an end to years of painful austerity demanded in exchange for the cash.

Investor relief

Investors reacted with relief to news of the outline deal, with shares in Athens closing Tuesday 2.14 percent higher for a fourth straight day of gains.

But in mid-afternoon trading on Wednesday the ATHEX index was down 1.25 percent.

An EU source stressed it was still not certain that the bailout would be finalised by next Thursday's ECB payment deadline -- leaving open the possibility that Athens might need emergency funding.

"We might need a few days' bridging (funding)," the source said on condition of anonymity.

"In that case, we need all the member states" to approve such a loan, the source added, posing a potential fresh headache for negotiators.

Eurozone finance ministers are likely to meet at the weekend to give the deal official endorsement at the top political level.

Finnish Finance Minister Alexander Stubb -- one of the hardliners on the accord -- had earlier stressed there was more work to be done, telling reporters: "Agreement is a big word."

But a Greek government source said Tsipras had requested an emergency session of parliament for Thursday -- with all lawmakers required to attend -- for the crucial vote on ratifying the deal.

Tsipras is under pressure from many hardliners in his radical left Syriza party who say the new accord will pile further austerity on a weakened economy and goes against the party's campaign pledges. He suffered a major mutiny by Syriza members in two previous votes on the bailout.

The embattled prime minister has warned that he may be forced to call early elections if the dissent continues.

An analyst at Capital Economics urged caution over the deal, saying: "While Greece appears finally to be on the verge of receiving a third bailout, the extremely optimistic economic and fiscal projections underlying the plan suggest that it might not last for very long."

Greece on Wednesday also raised 1.138 billion euros in three-month treasury bills at a steady interest rate of 2.7 percent.