GREECE was due to present its economic reform plans yesterday to seal a eurozone financial lifeline, but the government drew criticism from a veteran leftist and ruling party member that the deal let voters down.
Germany, the biggest contributor to Greece’s two bailouts totalling €240 billion, said any extra spending on Athens’ list of reforms had to be offset by savings or higher taxes.
After a climbdown in Brussels to win the conditional four-month agreement, the government of Prime Minister Alexis Tsipras declared the reform list would at least be decided by Greeks, in contrast to the austerity policies dictated by foreign creditors since they bailed out Athens in 2010.
“The list will include a series of reforms that the Greek government will propose – and I underline that,” said government spokesman Gabriel Sakellaridis.
Saying the list would go to Brussels before the end of yesterday, Sakellaridis made clear Athens was anxious to avoid any last-minute hitches in securing the funding needed to keep Greece afloat and avoid an exit from the eurozone.
“We aim for this list to be accepted by the partners. This is why there are consultations and discussions with the partners so that there is a mutually beneficial solution,” he said.
Tsipras has declared victory in Friday’s deal, which is conditional on Greece’s European and IMF creditors accepting the reform list, even though he had to accept an extension of the bailout programme he had promised to scrap.
But he drew withering criticism from veteran leftist Manolis Glezos, a Syriza member of the European Parliament who attacked the failure to fulfil Syriza’s campaign promises and said simply avoiding inflammatory wording would not soothe the public.
The deal renamed the “troika” — despised inspectors from the European Commission, European Central Bank and International Monetary Fund who monitored Greek compliance with bailout commitments — “the three institutions”.
“Renaming the troika as ‘institutions’, the bailout as an ‘agreement’ and creditors as ‘partners’ ... does not change the previous situation,” Glezos wrote in a blog.
Athens negotiated in Brussels under intense pressure. A senior banker said that €1 billion flooded out of Greek bank accounts last Friday alone. JP Morgan estimated last week’s outflow at €3bn, taking the total so far this year to €25bn, and meaning the banks were on track to run out of collateral for new ECB loans in eight weeks.
Yields on bonds issued by the eurozone’s more troubled members – Spain, Italy and Portugal – eased after the deal. “It’s kicking the can down the road, but it’s better than nothing and for the time being it will be seen as positive,” said Alan McQuaid, chief economist at Merrion
Stockbrokers.
Greek markets were closed yesterday for a public holiday.
The reforms, which the Eurogroup of eurozone finance
ministers will consider in a teleconference on Tuesday, aim to raise revenue in ways favoured by Tsipras’s leftist Syriza party.
Following a series of testy Eurogroup meetings, the international creditors will scrutinise the reforms to ensure they comply with another of Greece’s concessions — that nothing it does during the four months will burden the state budget.
A finance ministry official said the government wanted to raise €2 billion by tackling smuggling, including of oil, and also aimed to tax money from the black economy that has been sent abroad in recent years. It also planned to save about €1.5 billion euros by reducing the bill for government purchases by about 20 per cent.
However, the official said these figures were subject to change before the final list is sent to Brussels.
With Greece unable to fund itself commercially, the opposition and fellow eurozone member Ireland say Tsipras will have to negotiate a third bailout when the extension expires.
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 a long depression which has pushed unemployment to 25 per cent.d and wrong.
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