Greece bailout: Deadline looms for crucial reforms

The list to be submitted on Monday must be approved by international creditors to secure a four-month loan extension.

Analysts say a collapse of the deal would revive fears of a Greek exit from the euro.

Minister of state Nikos Pappas said the list would include measures to tackle tax evasion and streamline the civil service.

Germany’s Bild daily newspaper, citing an unnamed source, reports that Greece aims to recover 7.3bn euros (£5.4bn; $8.3bn) with measures to combat tax evasion.

A spokesman for the German finance ministry, Martin Jaeger, was quoted as saying by Reuters news agency that Berlin expected the Greek plan to be “coherent and plausible”.

Greece agreed at a meeting with its European Union and International Monetary Fund (IMF) lenders on Friday to submit the list of reforms before Tuesday.

The next few hours will determine whether last week’s deal on Greece will hold or whether the two sides are still too far apart on the conditions needed for the loan extension.

The Greek government will prioritise clamping down on tax evasion and smuggling in its list of reforms, hoping that will avoid more cuts in the public sector and may free up money to rehire civil servants and increase social spending.

But Germany and others are likely to insist that past austerity measures are irreversible. The European Commission, IMF and European Central Bank will deliver their verdict on Tuesday. If there are deep disagreements, the deal could collapse.

The Greek government will continue to sell this to its voters as the first time it has a real say in the reforms it will take but the reality is that the creditors will keep Athens on a tight leash and there is little room for manoeuvre.

Bild, Germany’s biggest-selling newspaper, broke down in an article (in German) what it said was a tax hit list devised by the Greek government.

It will reportedly seek to raise 2.5bn euros from the fortunes of rich Greeks, 2.5bn from back taxes owed by individuals and businesses, and 2.3bn from a crackdown on tobacco and petrol smuggling.

The newspaper was publicly attacked on Friday by Greek Finance Minister Yanis Varoufakis who remarked about an earlier story: “One must believe @BILD’s tall stories [about Greece] at one’s peril.”

Mr Jaeger said the Greek reform plan, once received, would be examined by Greece’s three creditors – the European Central Bank, the European Commission and the IMF.

Once the three lenders had delivered their opinion, it would be discussed by eurozone finance ministers in a conference call on Tuesday, he said, according to Reuters.

On Friday, German Finance Minister Wolfgang Schaeuble stressed that there would be no payment of new funds to Greece until the conditions of the deal had been met.

Mr Varoufakis has said the bailout agreement will be “dead” if the list of reforms his government is drafting is not approved.

The four-month extension deal is widely regarded as a major climb-down for Prime Minister Alexis Tsipras, who won power vowing to reverse budget cuts.

In effect, the deal has kicked down the road some of the more difficult issues, like the future sustainability of Greek debt, the BBC’s Chris Morris reports from Brussels.

For now the focus is on steadying the ship, and trying to produce an interim plan, he adds.

On Saturday, Mr Tsipras said in a televised address that his government had “won a battle, not the war”.

He called the deal an “important negotiating success” but warned that there was a “long and difficult road ahead”.

Unemployment is at 25%, with youth unemployment almost 50% (corresponding eurozone averages: 11.4% and 23%).

Economy has shrunk by 25% since the start of the eurozone crisis Country’s debt is 175% of GDP Borrowed €240bn (£188bn) from the EU, the ECB and the IMF.

 

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