Greek PM Tsipras will reportedly accept all of creditors' bailout conditions

Greek Prime Minister Alexis Tsipras will reportedly accept all his creditors’ bailout conditions that were on the table last weekend, with only a handful of minor changes.

The Financial Times said it has obtained a two-page letter sent by Tsipras to the heads of the European Commission, International Monetary Fund and European Central Bank, elaborating on the Tuesday’s surprise request for an extension of Greece's now-expired bailout and for a new, third €29.1bn rescue.

The bailout's expiry at midnight Tuesday night means the extension is no longer on the table, but Tsipras' letter could serve as the basis of a new bailout in the coming days, said the FT.

Tsipras' letter says Athens will accept all the reforms of his country's value-added tax system with one change: a special 30% discount for Greek islands, many of which are in remote and difficult-to-supply regions, be maintained.

On pension reform, Tsipras has reportedly requested that changes to move the retirement age to 67 by 2022 begin in October, rather than immediately. He also requested that a special "solidarity grant" awarded to poorer pensioners, which he agrees to phase out by December 2019, be phased out more slowly than creditors want.

"The Hellenic Republic is prepared to accept this staff-level agreement subject to the following amendments, additions or clarifications, as part of an extension of the expiring [bailout] program and the new [third] loan agreement for which a request was submitted today, Tuesday June 30th 2015," Tsipras wrote.

Ipek Ozkardeskaya, market analyst at London Capital Group, said: “There are rumours that the 5 July referendum may be cancelled, or that Tsipras, who was formerly encouraging a ‘no’ vote, might be turning favourable for a ‘yes’ vote as the growing anxiety on streets and the tightening rope around people’s necks – mostly mostly due to financial restrictions at micro levels – indicates that a Grexit would only worsen the economic conditions.”

Markus Huber, senior analyst at Peregrine & Black, said the letter would be a welcome development and a much-needed step in the right direction.

“The problem, however, is that this is coming a bit too late as last night the bailout program officially expired and consequently can't be extended, meaning a new package has to be negotiated and agreed on first for Greece to get access to much needed funds.”

He added: “Even if these negotiations will finally be taken seriously by all sides and have a successful conclusion, it still needs to be seen if he has the backing in parliament.”

Huber said new funds would be needed very quickly in order to keep banks from going bankrupt and to lift capital controls to avoid further damage to the economy.

The euro rose to $1.1145 following the news, while European stock markets extended gains.