CRI听力:Analysts Optimistic on Greece's Debt

The Greek government sent a package of reform proposals on Thursday to its euro zone creditors to avert bankruptcy.

Athens is now proposing a new set of tax hikes, pension cuts and economic reforms in exchange of a 53.2-billion-euro third bailout program through the European Stability Mechanism over the next three years.

The Greek parliament voted overwhelmingly on Saturday in favour of authorizing the government of Prime Minister Alexis Tsipras to negotiate with international creditors with the package.

The bill was passed by the plenum with 251 votes in favor and 32 against.

The latest reforms package is strikingly similar to the terms Greece had rejected in a referendum Tsipras had called in June.

Head of the Cologne Institute for Economic Research, Michael Hueter, said although he was skeptical about Greece's ability to enact all of the reforms, the Greek government's public support made the situation easier.

"The experience of the last five years is not very favorable for the assumption that they will [be] successful in succeeding all these, solvings of problems they have, but I think it's the first time that they have a government in Greece who have a big support from the public, impressive support in the parliament, so they are able to solve these problems more creatively and more... Straight to the target rather than the previous governments."

He added that he was optimistic that contagion in the euro zone could be avoided.

"I am very optimistic that we can avoid this because all the other crisis countries -- Portugal, Italy, Spain and Ireland -- had a very different situation and had a different experience from the last five years (of economic crisis). From the crisis management they were able to go ahead in the restructuring the economy and restructuring the public budgets. So we have a different situation than in spring 2010. There is an isolated problem of Greece and there is a more stable euro zone of the rest, so I am optimistic that we will be able to manage this problem."

Finance ministers of the 19-nation euro area will meet to decide whether to recommend opening negotiations despite exasperation at the five-year-old Greek crisis.

A senior EU official said the meeting would include discussions on whether Greece needs more debt relief.

Noah Barkin. Reuters Bureau Chief for Germany said the topic is one of the key issues to reach a deal.

"Yes, well, one of the big stumbling blocks has been Greek demands for debt relief. They are supported by the International Monetary Fund (IMF) which says that Greece cannot return to sustainable debt levels without significant debt relief. What we'll probably see is instead of a sort of classic haircut, which means writing down the face value of the debt, the principle, we are going to see a stretching out of maturities of Greek debt if there is a deal."

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 the following day and now faces a critical July 20 bond redemption to the ECB of 3.49 billion euros, which it cannot make without aid.

For CRI, I'm Guo Yan.