Euro lenders to pass bailout judgment as Greece backs reforms

"HEAVY HEART"

After the jubilation in Athens last Sunday following the resounding rejection of further austerity in a referendum, there was bitterness that parliament was being asked to accept a strikingly similar package of measures.

The leader of the right wing Independent Greeks party, the junior coalition party in Tsipras' government, said his lawmakers would back the proposals "with a heavy heart".

U.S. Treasury Secretary Jack Lew said on Friday that Greece and its creditors appeared to be closer to a deal, calling for an adjustment to Athens' debt burden to ease its cash flow.

Greece asked for 53.5 billion euros ($59 billion) to help cover its debts until 2018, a review of primary budget surplus targets in the light of the sharp deterioration of its economy, and a "reprofiling" of the country's long-term debt.

A senior EU official said the Eurogroup talks would include discussions on whether Greece needs some debt relief.

In addition to cash from the euro zone, if Greece makes payments it missed last month to the IMF, the global lender still has a facility to lend Greece some 16 billion euros.

Any deal would also have to be endorsed by national parliaments including in Germany, which must also formally approve the loan negotiations being started.

The latest offer includes defence spending cuts, a timetable for privatising state assets such as Piraeus port and regional airports, hikes in value added tax for hotels and restaurants and slashing a top-up payment for poorer pensioners.

Greek banks have been closed since June 29, when capital controls were imposed and cash withdrawals rationed after the collapse of previous bailout talks. Greece defaulted on an IMF loan repayment and now faces a critical July 20 bond redemption to the ECB, which it cannot make without aid.