Greece prepares reform promises for Monday deadline

Greece’s government prepared reform measures on Sunday to secure a financial lifeline from the euro zone, but was attacked for selling “illusions” to voters after failing to keep a promise to extract the country from its international bailout.

Leftist Prime Minister Alexis Tsipras has insisted Greece achieved a negotiating success when euro zone finance ministers agreed to extend the bailout deal for four months, provided it came up with a list of reforms by Monday.

Greeks reacted with relief that Friday's deal averted a banking crisis which fellow euro zone member Ireland said could have erupted in the coming week. This means Mr Tsipras has stood by the promise to keep the country in the euro zone.

Mr Tsipras maintains he has the nation behind him despite staging a climbdown in Brussels. Under the deal, Greece will still live under the EU-IMF bailout which he had pledged to scrap, and must negotiate a new programme by the early summer.

“I want to say a heartfelt thanks to the majority of Greeks who stood by the Greek government ... That was our most powerful negotiating weapon,” he said on Saturday.

"Greece achieved an important negotiating success in Europe. ".

Top Marxist members of Mr Tsipras’s Syriza party, a broad coalition of the left, have so far been silent on the painful compromises made to win agreement from the eurogroup.

But veteran leftist Manolis Glezos attacked the failure to fulfil campaign promises. “I apologise to the Greek people because I took part in this illusion,” he wrote in a blog.

“Syriza’s friends and supporters ... should decide if they accept this situation.”

Mr Glezos, a Syriza member of the European Parliament, is not a party heavyweight. But he commands moral authority: as a young man under the second World War occupation, he scaled the Acropolis to rip down a Nazi flag under the noses of German guards and hoist the Greek flag, making him a national hero.

A government official said Mr Glezos “may not be well informed on the tough and laborious negotiation which is continuing”.

Finance Minister Yanis Varoufakis said the reform promises would be ready on Sunday and submitted to Greece's EU and IMF partners in good time.

“We are very confident that the list is going to be approved by the institutions and therefore we are embarking upon a new phase of stabilisation and growth,” he said.

A government official said the reforms would include a crackdown on tax evasion and corruption.

The Brussels deal opens the possibility of lowering a target for the Greek primary budget surplus, which excludes debt repayments, freeing up some funds to help ease the effects of 25 per cent unemployment and pension cuts.

It also avoids some language which has inflamed many Greeks, angered by four years of austerity demanded by foreign creditors.

In the deal the "troika" of inspectors from the European Commission, European Central Bank and IMF, which monitors compliance with Greek bailout undertakings, is referred to as "the three institutions".

Mr Tsipras declared Greece was “leaving austerity, the bailouts and the troika behind”.

Nevertheless, government plans must still be approved by the re-named troika, although Mr Tsipras won election last month on a pledge to end the humiliation of foreigners dictating Greek economic policy.

The opposition pounced on the climbdown from promises that have raised huge expectations among Greeks.

"No propaganda mechanism or pirouette can hide the simple fact that they lied to citizens and sold illusions," said Evangelos Venizelos, leader of the socialist Pasok party.

Mr Venizelos was deputy prime minister in the last conservative-led coalition which succeeded in raising funds from financial markets with two bond issues last year. With the economy showing signs of growth after a depression which wiped a quarter off GDP, it had prepared to exit the bailout programme but lost power to Syriza on January 25th.

Friday's agreement merely buys time for Greece to seek a long-term deal with the Eurogroup. Euro zone members Ireland and Portugal have already exited their bailouts, but Greece faces yet another programme - on top of bailouts in 2010 and 2011 totalling €240 billion - when the extension expires.

"Once you get them into the safe space for the next four months, there'll be another set of discussions which will effectively involve the negotiation of a third programme for Greece," Minister for Finance Michael Noonan said on Saturday.

Reuters