Greek government submits reform proposals to Eurozone

The Greek government submitted on Thursday the latest list of reform proposals to the eurozone, which Athens has to fulfill in order to be granted a new bailout of EUR 53.5 B.

The Greek Parliament will hold an emergency vote on Friday in order to approve the proposal as a basis for an agreement with the creditors, daily Kathimerini reports. Eurogroup President Jeroen Dijsselbloem confirmed receiving the documents, but refrained from commenting before they have been assessed by the troika of international creditors.

A Greek official said that MPs will be asked to authorise the government to negotiate a list of “prior actions”, which should be taken before any new bailout is granted. Greek Prime Minister Alexis Tsipras and his cabinet drafted the latest reform proposals, which include tax rises, pension reforms and economic liberalisation measures. A further vote will be needed to turn the proposals into law next week in case eurozone leaders agree at their summit on Sunday that these will serve as a basis for starting negotiations on a three-year loan.

Hours before the midnight deadline, German Finance Minister Wolfgang Schaeuble admitted that Greece will need some debt restructuring as part of the new bailout programme. This would include extending loan maturities, shaving interest rates and lengthening a moratorium on debt service payments.

The reform package will be worth EUR 12 B over two years, which is more than the previously planned in order to offset a return to recession after months of difficult negotiations with creditors. According to the agreed timetable, the three international creditors should deliver their initial assessment by Friday evening.

In case it is broadly positive, eurozone finance ministesr will decide at the meeting of the Eurogroup on Saturday whether to recommend opening negotiations with Greece on a conditional loan from the European Stability Mechanism (ESM) bailout fund.