Greece makes further concessions to creditors

0bbfe52fc9cf1d57d7afd481a1e0c51f s8Greece yesterday submitted a proposed list of reforms in return for the €53.5bn new three-year bailout package the country is seeking from its creditors.

The Greek government has made further concessions on VAT and pensions, although some discrepancies with the creditors’ proposal remain – notably on labour market reform and military spending cuts. According to the International New York Times, France sent a technical team to Athens to assist the Greek government in drafting the new plan. The new proposals are being assessed by the three institutions – the European Commission, the ECB and the IMF – and are expected to be put to a vote in the Greek parliament today, ahead of tomorrow’s meeting of Eurozone finance ministers and Sunday’s meeting of EU leaders.

French President François Hollande tweeted that the Greek proposals are “serious and credible. They show a determination to stay in the Eurozone. Nothing is done yet, everything can be done.” German MP Michael Fuchs, deputy parliamentary leader of Angela Merkel’s CDU/CSU, told BBC Radio 4’s Today programme, “We have to be very careful because…I have a little bit of a problem to trust it. What is the difference between Sunday and today? On Sunday, the Greek people voted against these measures.” Ralph Brinkhaus, deputy chairman of the CDU/CSU, said, “Does anyone believe that these reforms will actually be implemented?” German news agency DPA quotes Latvian Prime Minister Laimdota Straujuma as saying, “For me, it will be very difficult to convince the [Latvian] parliament.”

Meanwhile, according to Greek media, Greek Prime Minister Alexis Tsipras told a meeting of SYRIZA MPs, “We have a mandate to bring a better deal than the ultimatum that the Eurogroup gave us, we do not have a mandate to take Greece out of the Eurozone.” European Council President Donald Tusk told the press yesterday, “A realistic proposal from Greece will have to be matched by an equally realistic proposal on debt sustainability from the creditors.” German Finance Minister Wolfgang Schäuble told a conference in Frankfurt, “Debt sustainability [for Greece] is not feasible without a haircut and I think the IMF is correct in saying that.” However, he added, “There cannot be a haircut because it would infringe the system of the EU.” French Economy Minister Emmanuel Macron told El País that “[Measures] to relieve the debt burden in order not to strangle the Greek economy will be needed.”

According to Handelsblatt, the German government is considering whether, in the event Greece and its creditors reach an agreement over a third bailout package, Greece could receive short-term financial assistance via the EU’s emergency fund, the European Financial Stability Mechanism, which was used to bail out Ireland and Portugal. The EFSM is funded by all 28 EU member states and decisions are taken by Qualified Majority Voting. Separately, Vassilis Korkidis – head of the Greek Confederation of Trade and Entrepreneurship (ESEE) – told Italian daily La Repubblica that, since the Greek referendum was announced, “We are registering 60 closures of small and medium-sized enterprises a day. €22 million of GDP are lost every 24 hours, and there are over 600 jobs less every day.”

Writing for CapX, Open Europe’s Pieter Cleppe writes that not Germany but the euro should be blamed for Greece’s woes, noting that “Greek politicians were able to burden their citizens with more debt than would ever have been possible outside of the Eurozone.”

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