By Matthias Sobolewski and Jan Strupczewski
BERLIN/BRUSSELS (Reuters) - Greece's new leftist-led government climbed down further to euro zone creditors on its plans to halt privatisations, boost welfare and raise the minimum wage as markets rallied on the prospect of a four-month extension of its financial rescue.
A letter sent to Eurogroup chairman Jeroen Dijsselbloem late on Monday set out in broad terms the measures Athens plans to implement by July, offering assurances it will not deviate from fiscal targets or roll back past reforms.
Crucially, it pledged not to reverse any ongoing or completed privatisations, and to ensure that the fight against what the government calls the country's humanitarian crisis "has no negative fiscal effects".
The six-page document with a cover note by Finance Minister Yanis Varoufakis, seen by Reuters, contained few figures but promised to improve tax enforcement, fight corruption and "review and control spending in every area of government spending".
After experts from the European Commission, European Central Bank and International Monetary Fund give an initial view of the list, euro zone finance ministers will hold a telephone conference from 1300 GMT to finalise the four-month extension.
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Greek financial markets, which reopened for the first time since Friday's outline deal between Varoufakis and euro zone finance ministers, surged on relief that the country had been pulled back from the brink of a potential banking collapse and possible state bankruptcy.
Government bond yields dropped by three percentage points and stocks hit a 2-1/2 month high due even though the country's longer-term survival inside the 19-nation single currency area remains uncertain. [ID:nL5N0VY1LH]
Dijsselbloem, who is also Dutch finance minister, told the European Parliament the Greek reform list was just a first step and it would take time to go into detail.
"I think they are very serious (about reforms)," he said. "But it is not going to be easy. This is just a first step... It's going to take time to really get into the details and to design a new contract or agreement which will carry us on for four months."
He hinted strongly that Athens, which has had two bailouts totalling 240 billion euros since 2010, would need a further aid programme when that period expires, saying: "I think we need to consider further support for Greece."
The euro zone could consider further debt relief measures if Athens met all the criteria specified in its November 2010 second bailout, "which hasn't happened yet", he said.
GERMAN VOTE REQUESTED
A Greek exit from the euro zone had not been discussed and was not on the table, Dijsselbloem said, adding that the only government that had held a meeting to prepare for a possible "Grexit" was in non-euro Britain.
In EU paymaster Germany, Finance Minister Wolfgang Schaeuble, who took the toughest line in the Greek negotiations, wrote to the speaker of the lower house of parliament requesting a vote this week on extending the bailout.
"Provided Greece avows its obligations and provided there is an agreement in the Eurogroup (of finance ministers), the German government would be in favour of the proposed extension," he wrote, according to business daily Handelsblatt.
Germany's rejection of an initial Greek request for a four-month loan extension last week forced Athens into a string of politically sensitive policy concessions, postponing or backing away from campaign promises to reverse austerity, scrap the bailout programme and end cooperation with the "troika" of EU, ECB and IMF inspectors.
The letter said Greece would phase in collective bargaining with a view to raising minimum wages over time but promised that any changes would be agreed with its partners.
While leftist Prime Minister Alexis Tsipras has won broad support in his coalition for the deal clinched in Brussels, some hardline leftists have criticised it and the conservative opposition has charged that his illusions have been punctured.
In a televised address on Saturday, Tsipras called the accord a victory for Greece, but participants said Athens was isolated in the talks and forced to make humiliating concessions because its banks were running out of cash.
Latvia's central bank governor, a member of the ECB's policymaking governing council, cast doubt on elements of the Greek reform plan, such as tackling tax evasion and smuggling, questioning how much extra revenue they would raise.
"Those are soft measures, which may partly fill the budget gaps in the short-term, but (in the case of Latvia)… nobody planned or budgeted it as permanent revenues," Ilmars Rimsevics told state broadcaster LTV.
Commenting on ongoing negotiations with Greece, he said: "For Europe, in a certain way, fatigue has set in, and this nursing and instructing all the time is also very burdensome."
(Additional reporting by Deepa Babington in Athens, Adrian Croft in Brussels, Erik Kirschbaum in Berlin, John Geddie in London and Aija Krutaine in Riga; Writing by Paul Taylor; editing by Anna Willard)