Greek Prime Minister Alexis Tsipras
Greek Prime Minister Alexis Tsipras addresses the European Parliament in StrasbourgReuters

The Greek government has tabled a fresh set of proposals to creditors aimed at unlocking billions in desperately needed bailout funds.

The country's new finance minister, Euclid Tsakalotos, has requested a three-year aid package from the European Stability Mechanism (ESM) and is offering major economic reforms in return.

A letter submitted by Tsakalotos outlining the proposals appeared to rubber stamp changes to pensions and tax laws put forward by troika creditors – the European Union, the International Monetary Fund and the European Central Bank (ECB) – that Greek prime minister Alexis Tsipras has previously said he would not endorse.

Crucially, Athens said it would implement the measures from next week, agreeing to a "comprehensive set of reforms and measures to be implemented in the areas of fiscal sustainability, financial stability and long-term economic growth".

Greece
A sign that reads 'End' taped between automated teller machines (ATM) outside a National Bank of Greece SA bank branch in ThessalonikiGetty Images

The country is facing a race against time to avert a Grexit with Tsipras' Syriza party extending capital controls and bank closures until Friday. The measures, which have been in place for over a week, limit withdrawals from ATMs to €60 (£43) per day.

The European Central Bank, which has been propping up the Greek banking system, has said that a failure to reach a deal by Sunday will see it withdraw its Emergency Liquidity Assistance (ELA) programme.

James Nixon, chief economist at Oxford Economics, said: "Time and again, when facing the precipice, European policy makers have managed to come up with a last-minute solution to avert disaster. But the tool box is now looking conspicuously empty. Greece now has just 48 hours to come up with a set of proposals that might form the basis of a new ESM-financedthird bailout to be discussed at a full EU summit on Sunday [12 July].

"Without an agreement, the ECB will withdraw ELA at the weekend, effectively bankrupting the Greek banking sector. To all intents and purposes Greece will effectively leave the euro area as of Monday morning."

Greek banks have watched their deposits slowly wither over the past several months, bringing them dangerously close to insolvency, and cash is now running dry.

Greece has been told it has to deliver details of the reforms to eurozone leaders by Thursday night so that any deal can be ratified at a European Union summit on Sunday.

Speaking at the European Parliament in Strasbourg this morning, Tsipras claimed Greece had become "an experiment in failed austerity", adding that money from previous bailouts went to Greek banks instead of ordinary people.

"I am confident that in the next two or three days we will be able to meet the obligations in the best interests of Greece and also the eurozone," Tsipras said.