Monday, February 23, 2015

BBC News - Greece bailout: Deadline looms for crucial reforms

Greece is preparing to present a list of reforms to lenders in order to secure a bailout extension.
Street vendors in Athens, 23 February
Greeks have seen their living standards drop sharply during the debt crisis
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.
Graphic showing how much Greece owes to whom
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.
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Analysis: Mark Lowen, BBC News, Athens
Greek Finance Minister Yanis Varoufakis (right) and German Finance Minister Wolfgang Schaeuble address a news conference following talks at the finance ministry in Berlin, 5 February Greek Finance Minister Yanis Varoufakis (right) will have to convince his German counterpart, Wolfgang Schaeuble, pictured here earlier this month in Berlin
It may seem like the naughty pupil submitting homework to the headmaster but Greece's government has spun it differently: as proof that Greeks are now "co-authors of their destiny".
Athens will send to Brussels a list of reforms it is willing to make in return for the loan extension. Its creditors will give their verdict tomorrow. If there is disagreement, the deal could collapse. If it needs fine-tuning, Greece has until April to do so.
The Greek government says it will suggest reforms to tackle tax evasion but in reality it will be forced to adhere to many of the austerity demands of the original bailout. As part of the deal, Greece has agreed not to take any unilateral actions to threaten financial stability.
It will still try to push for civil servants to be rehired and social spending increased but ultimately the creditors will have the final say. For many here hoping that the hated oversight of Greece will end, that is a galling prospect.
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'Long road ahead'
Bild, Germany's biggest-selling 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."
In a new article (in German) the tabloid breaks down what it says is 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.
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.
Greek PM Tsipras attends a cabinet meeting at the parliament building in Athens in February.The new Greek government, led by Prime Minister Alexis Tspiras, was elected by promising to reverse austerity
The four-month extension deal is widely regarded as a major climb-down for Prime Minister Alexis Tspiras, who won power vowing to reverse budget cuts.
On Saturday, Mr Tspiras 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".
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Greek couple look at adverts for rental properties
Greek economy in numbers
  • 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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