Fresh Greek bailout reform proposals were cheered by France and Italy today, raising hopes that a last-ditch compromise could be reached with the country's creditors to prevent a dreaded "Grexit."
The plan delivered by Prime Minister Alexis Tsipras's administration for study by the EU, IMF and European Central Bank was to be put to a vote late today by Greek lawmakers.
Tsipras has conceded ground on major sticking points including tax and pensions, in a bid to secure a new bailout, drawing encouragement from his biggest ally, French President Francois Hollande.
But he risks alienating a major share of his party's supporters, who rejected in a referendum last Sunday a very similar set of proposals put forward by Greece's creditors.
Some 8,000 people gathered in Athens ahead of the parliamentary vote to protest against carrying on with austerity, police said.
"The Greeks have shown a determination to want to stay in the eurozone because the programme they are presenting is serious and credible," Hollande said.
But he cautioned that "nothing is decided yet." Any new Greek rescue needs to be approved unanimously by eurozone members.
Italian Prime Minister Matteo Renzi declared himself "more optimistic" that a deal would be done.
But Germany, leading a bloc of sceptical eurozone nations, said the outcome of crisis talks this weekend was "completely open."
Greek Finance Minister Euclid Tsakalotos said today he believed "many" of his country's demands for debt relief will be accepted by eurozone partners whose ministers will meet Saturday.
He notably expressed confidence that Greece will be permitted to roll over a debt of 27 billion euros (USD 30 billion) in bonds held by the European Central Bank to the European Stability Mechanism, which would push back repayments.
The possibility of a breakthrough sent stock markets soaring in Europe, Asia and the US.
The euro briefly rose above USD 1.12 for the first time in July before falling back slightly in later trade, still up at USD 1.1152
Meanwhile the eurozone's major stock markets surged around three per cent today.
Eurozone finance ministers will make a 'major' decision tomorrow on the latest proposals from Athens, Eurogroup chief Jeroen Dijsselbloem said today.
"We have to make a major decision. Whichever way," Dijsselbloem, who is also the Dutch finance minister, told reporters ahead of a cabinet meeting in The Hague.
