Greece submits fresh list of reforms to euro zone authorities

Document agrees to some privatisations demanded by bailout inspectors

A pensioner holds a banner during an anti-austerity demonstration in Athens yesterday. Greece is expected to reach agreement with its euro zone partners and the IMF on a package of reforms next week. Photograph: Alkis Konstantinidis/Reuters

A pensioner holds a banner during an anti-austerity demonstration in Athens yesterday. Greece is expected to reach agreement with its euro zone partners and the IMF on a package of reforms next week. Photograph: Alkis Konstantinidis/Reuters

 

Greece has submitted a fresh list of economic reforms to euro zone authorities, estimating the measures could raise as much as €6 billion this year. It is the cash-strapped government’s most comprehensive effort so far to unlock €7.2 billion in bailout funds before it goes bankrupt.

The 26-page document relies on plans to crack down on tax evasion and fraud to raise most of the revenues. These include €875 million from audits of offshore bank transfers and €600 million from a new lottery scheme aimed at compelling consumers to demand value-added tax receipts.

The tenor of talks between Athens and its international bailout inspectors – the European Commission, European Central Bank and International Monetary Fund – has improved in recent days, and Greek officials have expressed hope they could reach an agreement on the measures as soon as next week.

Obligations

“The larger purpose of this document is, in the first instance, to unlock short-term financing that will permit the Greek government to meet its immediate obligations,” the document states.

“The Hellenic Republic considers itself to be a proud and indefeasible member of the European Union and an irrevocable member of the euro zone.”

The submission comes after a previous effort sent to the inspectors on Friday received a luke-warm reception from euro zone authorities, who said it lacked detail and substance.

Talks on the initial submission broke off on Tuesday without agreement and officials said there was little chance of restarting without more co-operation from Athens.

Despite the improved atmosphere, several EU officials said they did not expect a deal before the next scheduled meeting of euro zone finance ministers in Riga on April 24th.

Some officials remain concerned that Athens does not have sufficient funds to make a €450 million payment to the IMF on April 9th, but Greek officials insist they can scrape enough together to get by.

The group of 19 euro zone deputy finance ministers discussed the new reforms by phone on Wednesday, but there was little progress. One senior official said the new submission was still considered insufficient.

Although the submission marks another effort by Athens to meet euro zone concerns, the measures fail to address several issues bailout monitors have insisted on, including an overhaul of the pension system and greater labour market liberalisation.

Indeed, the proposal appears to reverse reforms in several of these areas. And while the document includes five measures under the heading “labour market reforms”, they include a gradual increase in the minimum wage and strengthening collective bargaining – both measures that would tend to undo reforms adopted earlier in the rescue programme.

Still, the document includes concessions to euro zone authorities, particularly in the area of privatisations.

The latest document says “all existing contracts will be honoured [and] all the procedures that have started are going to continue”. Remaining privatisations would be considered “on a case-by-case basis”, and are projected to bring in €1.5 billion this year, down from €2.2 billion in the original bailout agreement. – Copyright The Financial Times Limited 2015