Reservations expressed over Greek reforms list

Reservations expressed over Greek reforms list

Athens, February 25, 2015/ Independent Balkan News Agency

By Lefteris Yallouros

The Greek stock market hit a 2-1/2-month high on Tuesday, ith Greek banks up as much as 12 percent, after the country’s international creditors provisionally approved a list of economic reforms proposed by the Greek authorities.

Greek 10-year yields fell to a one-month low, down 98 bps at 9.17 percent, while three-year yields dropped 309 bps to 13.47 percent.

The four-month extension of the Greek bailout deal spread enthusiasm amongst investors. However, there were concerns raised by the country’s lenders concerning the government’s determination to see through a set of proposed reforms succesfully.

Eurogroup head Jeroen Dijsselbloem said on Tuesday that creditors will have to consider more support for Greece after the summer when its bailout expires, but that it was too early to say if a precautionary credit line could be granted. Dijsselbloem urged Greece to move quickly on updating and enforcing its reform proposals over the bailout extension.

The Greek reform plan is sufficient to continue giving the country aid but is lacking necessary detail, International Monetary Fund Christine Lagarde said.

In a letter to Eurogroup President Jeroen Dijsselbloem, Lagarde said the Greek list was comprehensive but “not very specific”. “In some areas like combating tax evasion and corruption I am encouraged by what appears to be a stronger resolve on the part of the new authorities in Athens,” Lagarde wrote. “In quite a few areas, however, including perhaps the most important ones, the letter is not conveying clear assurances that the government intends to undertake the reforms envisaged” she added.

The European Central Bank President, Mario Draghi, also wrote to the Eurogroup head saying “we will have to assess during the review whether measures which are not accepted by the [Greek] authorities are replaced with measures of equal or better quality in terms of achieving the objectives of the program.”

As details of the measures proposed by the Greek government emerged on Tuesday, reservations were also expressed by opposition parties. New Democracy leader Antonis Samaras accussed the government of accepting the memorandum extension in disguise.

Samaras insisted that two months of election uncertainty and a month of “virtual negotiation” were wasted for the country to go further back compared to where it was last November.