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Greece Clears Key Hurdles On Way To New EU Bailout

Greece cleared two hurdles July 11 on its way to getting another European bailout: it won tentative approval for a sweeping budget reform plan from top European lenders while Greece's own parliament resoundingly endorsed the plan.

Both legislators and lenders concluded the far-reaching reforms in taxes and pensions offered by Greek Prime Minister Alexis Tsipras provided a good starting point for negotiations on another rescue plan that would keep Greece within the eurozone.

Greece is scrambling to get approval of its reforms-for-loans plan this weekend by the full European Union to prevent a spiral into economic collapse next week. The nation's banks have been shuttered for two weeks and it is fast running out of cash, credit, and other vital economic resources.

In a sign that the long-sought reforms are likely to pass muster with the EU's 28 members at a summit they have called for July 12, Europe's top lending authorities gave the plan a green light on the eve of the parliamentary vote, leaking word that it formed a good basis for offering Greece a new bailout worth 74 billion euros.

Most of the new loans would come from the European Stability Mechanism, Europe's last-resort lender for countries in crisis, but the International Monetary Fund (IMF) also would pitch in 16 billion euros, authorities said.

In perhaps the most bittersweet victory for Greece's young leader Tsipras, the parliament overwhelmingly approved the renewed austerity plan as a starting point for negotiations with the EU.

With members of his own left-wing Syriza party deeply opposed to the plan's spending reforms and tax increases, most of the support came from opposition parties who viewed it as the only way to ensure Greece stays in the exclusive club of European nations.

Before the 231-32 vote in the wee hours of the morning, Tsipras gave an impassioned plea to back the plan, though it closely resembled an EU plan that he had villified and the public had resoundingly defeated in a referendum only a week earlier.

Admitting he had made mistakes in his short tenure as prime minister, Tsipras said he had come to believe the plan was the only way to prevent an economic fate for Greece that would be even worse than the deep, six-year-long recession the country has already endured.

"It is a choice of high national responsibility," he said. "We have a national duty to keep our people alive."

Tsipras said Greece is in a battle for its life.

"There is no doubt that for six months now we've been in a war," he said, adding that his government had fought "difficult battles" with the EU, and had lost some of them.

It was Tsipras's own allies on the left who were most unhappy with his unexpected embrace of austerity. Several Syriza members abstained from voting, while a few thousand demonstrators gathered in front of parliament to protest against the measures.

Tsipras' 11th-hour conversion to budgetary reform was applauded by European leaders.

French President Francois Hollande called his plan "serious and credible," while Italian Prime Minister Matteo Renzi said he was "more optimistic" that a deal rescuing Greece was within reach.

U.S. Treasury Secretary Jacob Lew was hopeful for a deal. "It's going to be a long slog through the next few days, but it should get worked out," he told a forum in New York.

The possibility of a breakthrough over the weekend keeping Greece in the eurozone sent stock markets soaring in Europe, Asia, and the United States July 10.

Even Germany, the most skeptical EU member, said the outcome of the weekend's crisis talks was "completely open."

Berlin leads a bloc of hardline eurozone nations saying that, after two bailouts over the past five years totalling 240 billion euros, and 107 billion euros in debt forgiveness from private lenders in 2012, Greece is looking like a bottomless money pit.

With reporting by AP, Reuters, and AFP