19th Feb 2019

EU waiting for cash-strapped Greece’s reform list

  • Greek prime minister Alexis Tsipras is under pressure from his eurozone colleagues and his own radical left party (Photo: consilium.europa.eu)

A week after Greece was asked by EU partners to "quickly" provide a list of reforms to unlock the next tranche of bailout money, no such document has been produced, while the country’s financial situation appears to be deteriorating by the day.

There have been few signs of when the promised list will be appear. Jean-Claude Juncker, the president of the European Commission, on Wednesday (25 March) said the Greek prime minister had told him he was "ready to present his reforms by the end of this week, beginning of next week”.

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  • Greek banks deposits are at their lowest level for 10 years (Photo: Odysseas Gp)

A spokesperson for the Greek government earlier said they would appear by Monday (30 March) at the latest.

There is widespread speculation on what the list will contain, with the leftist Tsipras repeatedly saying that he will not introduce austerity measures, in keeping with his election promises.

Greek daily Kathimerini reported that reforms being prepared included an extension of a property tax as well as labour, pension and VAT changes.

"The government is concerned that [the reform package] will contain a number of items that will not go down well within Syriza," wrote the newspaper, referring to Tsipras’ radical left party.

Speaking on Wednesday, Greece’s national independence day, Tsipras said that "nothing was given [to the Greek people] for free, it was claimed after struggle".

"When the Greek people demand something, are decisive and have justice on their side, they can achieve everything".

Euro finance ministers could meet as soon as the Greek government presents the list of reforms. The Eurogroup needs to agree to unblock the remaining €7.2 billion of Greece’s bailout.

With the Easter break next weekend in Brussels and most of the Eurozone countries, the agenda is tight.

Meanwhile, Greece’s financial situation is deteriorating, with loan repayment as well as pension and civil servant payment deadlines looming.

Tsipras has been asking for cash from the European Central Bank (ECB) and the Eurogroup, with mixed results.

On Wednesday, the ECB raised the cap on emergency funding to Greek banks to just above €71 billion, a lower threshold that Athens wanted.

On the same day, the Euro working group rejected Greece’s demand to receive €1.2 billion from the European financial stability facility. It said the move was "legally impossible."

The Greek government wanted to use that money to recapitalise its banks, weakened by massive deposit losses.

Greek people withdrew €7.6 billion from the banks in February, it was announced Thursday (26 March), while the country’s lenders on had €140.47 billion in their coffers at the end of February - the lowest level for 10 years.

One potential source of cash as well as a political aim for the Greek government is the fight against tax evasion.

Greece started talks on Thursday with Switzerland over recollection of illicit Greek money in Swiss banks.

Swiss secretary of state for international financial affairs Jacques de Watteville said the Alpine country’s banks had around €6.3 billion in Greek assets.

"These figures, dating from 2013, do not say anything about a taxable percentage," he said in Athens.

According Austrian tax expert Friedrich Schneider, however, some €80 billion are held by Greeks in Swiss bank accounts, of which two thirds are illicit.

He says a deal with Switzerland would allow Greece to recover €10-15 billion.

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