Greece issues last-minute reform proposals to resolve debt deadlock

22 Jun 15

Eurozone finance ministers have welcomed the submission of a revised reform package from Greece, which could form the basis of a deal later this week to end the country's debt crisis.

Greek prime minister Alexis Tsipras  presented the leaders of Germany, France and the European Commission with a new package of reforms in a bid to unlock the final €7.2bn tranche of bailout funds to prevent bankruptcy.

The list of new economic reforms which, was emerged yesterday ahead of an emergency summit, were intended to give a “definitive solution” to break the five month deadlock in bailout negotiations, the Greek government said.

A statement from Tsipras’ office said: “The prime minister presented three leaders [with] Greece’s proposal for a mutually beneficial agreement that will give a definitive solution and not a postponement of addressing the problem.”

Tsipras, who was elected in January, promised the end of “austerity destruction” and “radical change” has since resisted demands to cut pension and wage spending. But Tsipras is now willing to consider increasing VAT or other levies to satisfy international creditors, according to reports.

Additionally, Greece needs to immediately access funds to avoid defaulting on a €1.6bn International Monetary Fund that is due on June 30.

IMF chief Christine Lagarde recently warned that there was “no grace period” with the deadline.

Following yesterday's meeting, Eurogroup president Jeroen Dijsselbloem said the proposals were “a positive step in the process”.

However, the timing of the submission had given the troika – the International Monetary Fund, the European Central Bank and the European Commission – very little time to assess them.

Work was now underway to examine the plan, he said, with a possible final agreement to unlock the bailout cash later this week.

“The work can start immediately as far as we are concerned,” he said.
“If all goes well, the Eurogroup will have another meeting later this week to hear the final outcome of the talks with the Greek authorities.”

Commission President Jean-Claude Juncker added that the proposals were “a major step taken by the Greek authorities”.

He added: “I am confident that the Eurogroup on Wednesday will produce results to be submitted to the European Council on Thursday. I am convinced that this is not only our intention to finalise the decision-making process this week - we will finalise the process this week."

  • Judith Ugwumadu

    Judith writes about public finance, public services and economics across Public Finance International and Public Finance. She previously undertook reporting stints at Financial Adviser, Global Security Finance and The Sunday Express.

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