Greece prepares set of proposals ahead of crucial Eurogroup meeting

Greece prepares set of proposals ahead of crucial Eurogroup meeting

Athens, February 10, 2015/ Independent Balkan News Agency

By Lefteris Yallouris

Speaking in Parliament Monday afternoon, Greek Finance minister Yanis Varoufakis outlined the plan he will present to Eurogroup counterparts during Wednesday’s summit.

The Greek government will “move ahead with deep reforms” Varoufakis told MPs, adding that 70% of the reforms and commitments that are in the current bailout deal will be implemented and the rest will be scrapped.

Varoufakis also revealed that budget balance will remain intact but the current government will not negotiate with troika inspectors for the conclusion of the current bailout deal which runs out at the end of February.

The Greek minister’s speech was seen as a significant move away from his party’s pledge to abolish the memorandum. His remarks come just a day after Prime Minister Alexis Tsipras, vowed to turn away many of the austerity measures Greece was expected to implement as part of its rescue program. Yanis Varoufakis said the government did not want “to tear up the memorandum nor to enforce it faithfully.”

Instead, a Finance Ministry source revealed Monday that a set of ten new reforms which Greek officials are to agree with the Organization for Economic Cooperation and Development will be presented to lenders instead.

The source also said Greece will propose its primary surplus target (3 percent of GDP for this year) is reduced to 1.49 percent; the slashing of sovereign debt through a swap plan; and finally, the easing of the “humanitarian crisis” the country faces.

In terms of financing, ministry sources said Greece wants to secure the 1.9 billion euros in profits from the Greek bonds held by the Eurosystem and will seek to issue T-bills, some 8 billion euros above the 15-billion-euro limit which Greece has exceeded. Authorities are also keen to raise the threshold for emergency liquidity assistance from the European Central Bank.

Finally, the government will propose funds left over from the recapitalization of Greek banks are used to assist Greek lenders in dealing with nonperforming loans.

Judging from statements in the run-up to crucial Eurogroup and EU Council meetings, Greece’s lenders are not expected to respond positively to the government’s proposals. European Commission President Jean-Claude Juncker characteristically advised the Greek government on Monday not to assume the eurozone would simply accept all the promises Mr. Tsipras has made.

“What counts is what Greece will put on the table,” Angela Merkel told a joint press conference with US President Barack Obama in Washington. “I look forward to hearing Angela’s assessment of how Europe and the IMF can work with the new Greek government to find a way that returns Greece to sustainable growth within the eurozone,” Obama said.