The government of Greek Prime Minister Alexis Tsipras sought a three-year bailout loan of at least 53.5 billion euros ($59.2 billion), in a last-ditch effort to keep the country in the euro.

In exchange, it offered a package of reforms and spending cuts, including pension savings and tax increases, similar to the one presented by creditors last month. The proposal was submitted late Thursday and will be presented to the Greek Parliament Friday. It is set to be discussed at a summit of European Union leaders Sunday to determine whether Greece will get a new bailout, or be forced to leave the single currency.

Although the odds of a so-called Grexit have climbed, “we continue to see Greece staying in the euro as marginally more likely, not least because the majority of Greeks prefer so,” Deutsche Bank analysts wrote in a note to clients. “Europe is intent on forcing an outcome either way.”

Market reaction suggested investors believe a deal can be done, or that the European Central Bank can successfully contain the fallout if one isn’t. The benchmark Stoxx Europe 600 Index rose 2.2 percent and Greek, Portuguese and Italian bonds rose. The euro rose 0.4 percent to $1.107.

Greece’s proposal for a three-year bailout loan was similar to the one presented by the European Commission on June 26. It includes creditors’ longstanding demands for sales tax increases and cuts in public spending on pensions. Greece also proposes the restructuring of its debt and a package of growth measures of 35 billion euros.

Source : Bloomberg