Greece on Thursday submitted a new bailout plan to its eurozone creditors proposing a pensions overhaul and tax hikes in return for debt relief and 53.5 billion euros (S$80.06 billion) in aid.

The country needs this third bailout to avoid defaulting on its 320 billion-euro public debt and having to exit the euro.

The plan will be studied by eurozone ministers on Saturday before a make-or-break summit of all 28 European Union leaders on Sunday.

The 13-page document lays out proposals similar to those put forward by Greece's creditors on June 26 that Athens had initially rejected and put to a public referendum.

1. Raise sales tax

The Value Added Tax (VAT) will be raised to 23 per cent for most goods and services, including for restaurants and caterers which currently enjoy 13 per cent.

Basics such as food, energy and water will remain at 13 per cent, while the rate will be fixed at six per cent for medical supplies, books and theatre.

This is expected raise government revenue by 1.0 per cent of gross domestic product.

2. Abolish island tax breaks

Cut financial advantages offered to Greece's islands, including doing away with a 30 per cent VAT break.

This would start on the wealthiest islands in October and those most popular with tourists, and be extended to all islands by the end of 2016.

3. Raise other taxes

Corporate tax will go up from 26 per cent to 28 per cent - meeting the demands of Greece's creditors but below the 29 per cent initially put forward by Athens.

Taxes on luxury items will also be raised and a tax on television advertising will be introduced.

4. Pension reform

The retirement age will be fixed at 67, or 62 for people who have made 40 years of contributions by 2022. On average, Greek men now retire at 63 and women at 59.

Athens said it will also "create strong disincentives to early retirement" including adjusting early retirement penalties.

5. Cuts to military spending

Athens will cut 100 million euros from its military budget this year and 200 million euros in 2016. This is below the 400-million-euro reduction creditors wanted.

6. Clamp down on tax dodging

Athens has put forward measures to clamp down on tax evasion, a huge problem in Greece, and to streamline its tax collection systems.

7. Sell off state companies

The state's remaining shares in Greek telecoms giant OTE will be sold and Athens will commit to privatising the ports of Piraeus and Thessaloniki no later than October.

8. Cut deficits

Athens had initially agreed with its creditors' demands to cut its primary surplus (government spending less income from taxes) to one per cent of GDP this year, followed by 2.0 per cent in 2016 and 3.0 per cent in 2017.

But on Thursday, Greece indicated these targets would need to be re-examined in light of the dire economic conditions gripping the country, including the impact of capital controls and the shutdown of the banking system.

9. Rein in public debt

Greece has also promised to rein in its public debt, currently 180 pe rcent of GDP.

10. Reform the civil service

Consultants will be brought in to assess civil servants and a series of measures are planned to modernise the public sector.

Source: AFP