- Jean-Claude Juncker, European Commission President
A ray of hope emerged in what seemed an endless standstill over the Greek debt situation. After Greece's European partners welcomed an offer from Athens to cut its pension bill and raise extra money from VAT, hopes for a deal rose sharply and Greece stepped back from the abyss. The reform proposal included a new tax on businesses, on the wealthy and some increases in the VAT rate on particular items. Athens had also agreed with the International Monetary Fund and Euro area officials that the targeted budget surplus would be 1% of GDP this year, 2% next year and 3% the year after. Brussels called Greece's offer "detailed, credible and impressive", and saw it as the basis for an agreement that would have further bailout funds released to Greece. European Council President Donald Tusk called the Greek proposal "a positive step forward", and said the aim was to have the European finance ministers approve a cash-for-reform package on Wednesday evening and put it to Euro area leaders for final endorsement on Thursday morning.
The cash-deprived Greece must make the 1.6 billion euro repayment to the IMF by June 30 or be declared in default, potentially causing a bank run and capital controls. In the meantime, emergency funding from the ECB will allow Greek banks to stay open, amid reports that further 1.6 billion euros were withdrawn from the banking system on Monday.
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