WT: Eurozone to meet later to give verdict on Greek reform plans
BRUSSELS (AP) — Greece’s creditors in the 19-country eurozone appeared Tuesday to be heading toward a positive assessment of a list of reform measures Athens has sent in order to get a 4-month extension to its bailout, which would keep the country afloat.
An encouraging initial reaction from the so-called institutions — the European Commission, European Central Bank and International Monetary Fund — needs to be backed up by the eurozone for the bailout extension to be granted. Eurozone finance ministers will meet by teleconference later Tuesday to assess Greece’s plans.
Greece’s bailout program ends at the end of the month and without further support over the coming months, the country faces the possibility of going bankrupt, imposing capital controls and ditching the euro.
The institutions “are quite positive,” Jeroen Dijsselbloem, the head of the so-called eurogroup of finance ministers said of the initial reaction of the three technical groups looking at the Greek reform promises.
“This is a good point of departure to continue our work,” he said. He confirmed that a teleconference would take place this afternoon.
The reform plans, which include measures to deal with tax evasion and corruption and were sent ahead of Monday’s deadline, appear to have met with a favorable response both within policymaking circles and in the markets. The main stock market in Athens was up 7 percent in lunchtime trading.
The reform list “is sufficiently comprehensive to be a valid starting point,” EU Financial Affairs Commissioner Pierre Moscovici wrote. “We are encouraged by the commitment to combat tax evasion and corruption … as well as to pursue reforms to modernize the public administration.”
In its list of reforms, the Greek government says it will combat tax evasion and corruption, reduce bureaucracy, review public spending, modernize the pension system, reform the judicial system and address rising poverty through measures that have “no fiscal effect.” It says authorities will “turn the fight against corruption into a national priority.”
It pledges not to roll back any privatizations that have already been completed and to “respect the process, according to the law,” of any tenders that have already been launched. Privatization was one of the elements of Greece’s bailout that Tsipras’ Syriza party had promised to cancel.
The letter is a general outline of policies and does not include any figures or specific details on how the policies will be achieved.
Moscovici said he would work “with the new administration to elaborate what are at the moment still general commitments and transform these into clear policy actions.”
Caught between its campaign pledges and pressure from creditors, Greece’s left-wing Syriza government delivered the list on the cusp of Monday night’s deadline. The government was asked to present a list last Friday at a meeting of the 19 finance ministers of the eurozone so its bailout request could be met.
Dijsselbloem hoped that developments Tuesday will “contribute to restoring trust between all parties and help to get the recovery in Greece back on track.”
“It’s crucial to stabilize the situation in Greece, allowing us time to work on future cooperation with Greece and bridging this period,” Dijsselbloem told EU legislators.
If the eurozone ministers back it, the list goes to national parliaments for further approval. The German government, so often the toughest critic of Greece’s financial plight, wrote to Parliament requesting its approval of a four-month extension of the Greek aid program — on condition that the Greeks provide the reform list and that it is approved by the “institutions.” A vote is expected on Friday.
