Greece’s latest round of reform proposals have so far failed to satisfy creditors, with discussions set to continue with its international lenders in the coming days ahead of an April 9th IMF repayment deadline.
Greece has submitted a list of proposals to euro zone officials in a bid to unlock billions of euro to help keep the country afloat. But the list needs further work, according to EU sources, with officials from the IMF, European Commission and ECB set to thrash out further details in the coming days.
“Constructive talks are ongoing since Friday but we’re not there yet,” a commission spokesman said yesterday, adding that the proposals “required a lot of technical work”.
Additional revenues
Among the proposals are plans to raise around €3.7 billion in additional revenues by auditing bank account transfers, a clampdown on illegal smuggling and the collection of tax arrears. Greece also plans to establish a bad bank and raise around €1.5 billion through asset sales, less than the €2.2 billion originally envisaged.
As credit default swaps rose, indicating rising investor misgivings about Greece's ability to repay its debts, prime minister Alexis Tsipras told the Greek parliament last night that the country was seeking an "honourable compromise" and would not "capitulate".
He also reiterated that Greece needed its debt to be restructured if it was to be repaid. During a debate in parliament, Mr Tsipras strongly criticised Opposition leader and former prime minister Antonis Samaras for failing to tackle tax evasion during his premiership. The leader of the centre-right New Democracy also urged the government to meet the €450 million payment due to the IMF on April 9th, warning that failure to do so would be "extremely serious".
Despite calls for more detailed reforms from Athens before the provision of extra cash, German chancellor Angela Merkel struck a positive note during a visit to Finland, apparently dismissing suggestions that her policy on Greece is being guided by the public mood in Germany. "What I'm doing politically does not rely on the polls, which vary quite a bit, but rather if Greece will be able to fulfil the expectations that we all have."
Ireland’s experience
Once again the chancellor cited Ireland’s experience of renegotiating bailout terms. “In the end, the overall framework must add up. We saw this in Ireland when a new government changed parts of the programme. But in the end, the financial stability of the country must be restored. Greece is talking with the institutions now. We are waiting for the talks and we will wait for the evaluations of the institutions.”
Standing alongside Ms Merkel in Helsinki, Finnish prime minister Alex Stubb warned that Greece must adhere to the terms of the agreement signed on February 20th which sanctioned a temporary four-month extension of the Greek bailout on condition that reforms were agreed.
“One should be quite honest and say that time is running out but the conditions will not be changed,” he said. Finland has consistently been one of the most vocal critics of Greece’s plans to renegotiate its bailout.
In Madrid, Spanish economy minister Luis de Guindos said a Greek exit from the euro would be “a failure for all of us” and “terrible for Greece and monetary union”.– (Additional reporting: Bloomberg)
