Wednesday

17th Jul 2019

Greece's creditors study new reform plans

  • Speculation has increased that Greece will ask Russia for help (Photo: Gerard McGovern)

Greece's creditors are studying new reforms put forward by Athens on Friday (27 March) meanwhile leading centre-right German MEPs have warned that Greece should not seek help from Russia.

Athens said the reforms would raise around €3bn for the heavily indebted country, which needs to have a to-do list greenlighted by its lenders in order to secure a €7.2bn tranche of bailout money.

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The Greek government said the programme did not contain any "recessionary" measures, with the far-left government of Alexis Tsipras seeking to maintain campaign promises made before his election in January.

The reforms include plans for privatisation, moves to combat tax evasion as well as higher taxes on alcohol and cigarettes - but they are considered still too vague by some.

Gerda Hasselfeldt, the head of the centre-right CSU parliamentary group, told Die Welt"newspaper that Greece must present detailed proposals instead of "vague financial pledges".

The plans represent an attempt by Greece to unblock the impasse with its eurozone partners who have been demanding concrete measures in return for bailout money.

On 20 February, Athens and its partners agreed to a four-month extension of the bailout which had been due to run out at the end of February but since then both sides have been locked in an escalating war of words while speculation mounts about how long the Greek government has before it runs out of cash.

Valdis Dombrovskis, EU commissioner in charge of the euro, told Die Welt that time was running out.

"It is clear that we need to make progress. We have wasted too much time trying to sort out technical issues," he said.

The Latvian official, a former prime minister who oversaw major budget tigthening in his own country, said he would not name a "date" for when money would run out in Greece but added "the liquidity situation is very tight".

Bubbling in the background, meanwhile, is the question of whether Tsipras' government will ask Russia for help - a move that would likely cause major controversy in the EU which is struggling to maintain a uniform line on its sanctions on Moscow following its actions in Ukraine.

Andrey Maslov, Russia's ambassador in Greece, told Kathermerini newspaper Sunday that Tsipras' visit to Moscow on 8 April will be a "big event".

“If the Greek government submits a request for a loan, it will be examined – as Foreign Minister Sergey Lavrov said after meeting his counterpart Nikos Kotzias and as Russian Finance Minister Anton Siluanov has said,” he said.

He also praised Greece, which has spoken out against the EU's sanctions on Russia, for helping "ease the tension" between the two sides.

All eyes are set to be watching a visit to Russia today (30 March) by Greek energy minister Panagiotis Lafazanis parliament speaker Thanasis Petrakos.

According to a report in Spiegel Online, the Greek politicians are set to ask Russia to lower its gas price for Greek households and well as lift its embargo on food imports in Greece - part of a wider Russian response to EU sanctions.

Politicians from Germany - which has taken both a tough line on Greek reforms and is pushing for sanctions to remain in place on Russia - have criticised Athens potentially seeking helping in Moscow.

"Prime minister Alexis Tsipras is following a very risky strategy," Manfred Weber, the head of centre-right in the European Parliament, told Spiegel Online.

Herbert Reul, a German centre-right MEP, said "those who play with fire and now look for help in Russia can get their fingers burnt".

Agenda

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Analysis

Greece's cash-flow crisis

The general view amongst commentators and analysts is that Greece needs an agreement with its creditors by mid-April to prevent a default.

Clock ticking as Greece continues talks with creditors

Talks between Greece and its creditors are continuing with just over a week to go before Greece is due to make a payment to the IMF and amid uncertainty over how much cash the government has left.

EU hesitates to back France over US tariff threat

France has passed a new tax on tech companies that will affect US global giants like Facebook. Donald Trump has threatened retaliatory tariffs over it. The EU commission says it will "coordinate closely with French" on the next steps.

EU banks more vulnerable to shocks than feared

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Feature

Romania enlists priests to promote euro switchover plan

Romania is due to join the single currency in 2024 - despite currently only meeting one of the four criteria. Now the government in Bucharest is enlisting an unlikely ally to promote the euro to the public: the clergy.

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