Greece races to finalise reforms before Monday

Greece is under pressure to finalise reform proposals to keep its loan lifeline open as part of an EU debt deal, with its anti-austerity prime minister warning of “real difficulties” ahead.

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The new hard-left government in Athens has until Monday to convince its sceptical European creditors that it could piece together a credible set of alternative fiscal reforms.

“The list will be submitted and I am absolutely certain it will be approved,” Finance Minister Yanis Varoufakis said after a cabinet meeting.

“We are drawing it up as we speak, it will be completed tomorrow,” he told reporters.

After a last-ditch negotiation on Friday that saw his government dramatically climb down from its radical agenda, Prime Minister Alexis Tsipras insisted that Athens had achieved an “important negotiating success” which “cancels out austerity”.

In a televised address, Tsipras said his government had foiled a plan by “blind conservative forces” in Greece and abroad to bankrupt the country at the end of the month, when its European bailout had been scheduled to expire.

But as fears of a disastrous Greek exit from the eurozone receded, the 40-year-old premier warned that the “real difficulties” lie ahead. He said his government would now focus on negotiating a new reform blueprint with Greece’s creditors by June.

The government which came to power last month pledging to end deeply unpopular austerity measures and renegotiate Greece’s huge debt, had asked for a six-month loan assistance until it can submit its four-year reform plans.

Instead, it received a maximum of four months in which to reach an agreement with its eurozone partners, but no money to tide it over in the meantime.

The opposition socialists said the deal took Greece “kilometres backwards” and accused the new government of engaging in “theatrics for domestic consumption”.

“From a symbolic and therefore political point of view, the Greeks yielded on everything,” Daniel Gros, director of the centre for European policy studies, told Italy’s La Stampa daily.

“They can hope to receive nothing now … only to give,” Gros said.

Athens said it had averted threatened cuts to pensions and tax hikes, and had persuaded its European creditors to drop unrealistic budget demands.

To win the hard-fought deal, Athens pledged to refrain from one-sided measures that could compromise existing fiscal targets, and had to abandon plans to use some 11 billion euros ($A16.05 billion) in leftover European bank support funds to help restart the Greek economy.

On Tuesday, the detested “troika” of creditors will decide whether to proceed with Friday’s agreement, with the chance that the compromise could be scrapped if they are not satisfied.

“If the list of reforms is not agreed, this agreement is dead,” Varoufakis admitted after the talks.

On Saturday, he added that a new eurozone meeting would be called if Greece’s proposals are rejected.

The government had promised to spend 2 billion euros ($A2.92 billion) this year on poverty relief for thousands of families hit by five years of wage cuts and tax hikes.