Sunday

21st Jan 2018

Eurozone chief backs Greek reforms, but says more needed

  • Dijsselbloem: We fully support a functioning tax collection system, but short-term measures may be needed (Photo: consilium.europa.eu)

Eurozone chief Jeroen Dijsselbloem has backed the reforms plan submitted by the Greek government, but warned that measures such as a functioning tax collection system take time and the budget must not go "off-track" in the meantime.

Speaking in the European Parliament on Tuesday (24 February), Dijsselbloem, who chairs the meetings of eurozone finance ministers, said the list was a "first step" towards Greece receiving the remaining bailout money and possibly negotiating a third bailout.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

"Some of the Greek government's ambitions which we fully support, for instance an efficient tax system, will take time. It's one thing to pass omnibus laws through the parliament, another to actually implement those measures," he said.

"And the question is what we do meanwhile. We cannot allow the budget to go off-track, some more short term measures may be needed," Dijsselbloem added.

He was due to hold a conference call with fellow eurozone ministers at 14.00 Brussels time, during which it is expected Greece will get the green light for its bailout - which runs out on 28 February - to be extended by four months.

The reforms plan submitted "at 23.15 on Monday night", ahead of a midnight deadline, according to Dijsselbloem - is a major climb-down from previous pledges made by the far-left government led by Alexis Tsipras.

The seven-page letter, obtained by Reuters and the Financial Times, says it is just a "first comprehensive list of reform measures", which will be "further specified and agreed by the end of April 2015".

It pledges "robust efforts" to improve tax collection and fight evasion and "work toward creating a new culture of tax compliance to ensure that all sections of society, and especially the well-off, contribute fairly to the financing of public policies."

But the Greek government also commits itself to "review and control spending in every area of government spending (e.g. education, defence, transport, local government, social benefits)" - after initially promising to raise pensions and the minimum wage.

On pensions, the reforms plan pledges to "eliminate loopholes and incentives that give rise to an excessive rate of early retirements" and "consolidate pension funds to achieve savings".

It also says the Greek government will strive to bring pension contributions and income closer together and provide assistance to employees aged between 50 and 65 "so as to eliminate the social and political pressure for early retirement which over-burdens the pension funds".

Fighting corruption, money laundering and specifically the smuggling of fuel and tobacco products are other priorities mentioned in the letter.

The Tsipras government also pledges to reduce the number of ministries from 16 to 10; reduce the number of "special advisers" in the government; and to cap travel expenses and other benefits for ministers, MPs and other top officials.

On the pledge made last week by the Greek government that it will pardon the debt of poor people, the letter is more nuanced. It pledges to "de-criminalise lower income debtors with small liabilities" and target high-earners who have failed to pay their taxes, but without creating any moral hazard.

Labour market reforms - another thorny issue in the past weeks between the Greek government and its eurozone peers - are to be expanded and developed "in agreement with partners and when fiscal space permits". The Greek government now speaks of "phasing in" collective wage bargaining, and adds that this will "balance the needs for flexibility with fairness".

"This includes the ambition to streamline and over time raise minimum wages in a manner that safeguards competitiveness and employment prospects," the reforms plan reads.

"The scope and timing of changes to the minimum wage will be made in consultation with social partners and the European and international institutions, including the International Labour Organisation, and take full account of advice from a new independent body on whether changes in wages are in line with productivity developments and competitiveness," it adds.

The European Commission, for its part, praised the to-do list, saying it is "sufficiently comprehensive to be a valid starting point".

Greece to get four extra months under current bailout

Greece has agreed to all the conditions laid out by Germany and is likely to get its bailout programme extended by another four months, provided international creditors give a green light on Monday.

Eurozone clears path for Greek bailout extension

Eurozone finance ministers have approved a list of reforms submitted by Athens and cleared the path for national parliaments to endorse a four-month extension of the Greek bailout.

Catalonia prepares for rule by Skype

The two biggest parties in Catalonia have vowed to put Puigdemont back in office despite Madrid's threat to maintain direct rule.

News in Brief

  1. Germany confirms attendance at air quality summit
  2. Nearly half of 'fixed' Dieselgate cars show problems
  3. YouTube, Twitter, Facebook up hate speech deletion
  4. UK mulls bridge to France
  5. German far-right float anti-asylum bill
  6. EU Parliament to investigate glyphosate-decision process
  7. 'Mutagenesis' falls outside EU's GMO rules, says EU top lawyer
  8. Decision on Polish MEP's Nazi-era slur postponed

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Solutions for Sustainable Cities: New Grants Awarded for Branding Projects
  2. Mission of China to the EUTrade Between China, Belt and Road Countries up 15%
  3. Nordic Council of MinistersOresund Inspires Other EU Border Regions to Work Together to Generate Growth
  4. Mission of China to the EUTrade Between China, Belt and Road Countries up 15%
  5. AJC Transatlantic InstituteAJC Calls on EU to Sanction Iran’s Revolutionary Guards, Expel Ambassadors
  6. Dialogue PlatformRoundtable on "Political Islam, Civil Islam and The West" 31 January
  7. ILGA EuropeFreedom of Movement and Same-Sex Couples in Romania – Case Update!
  8. EU2017EEEstonia Completes First EU Presidency, Introduced New Topics to the Agenda
  9. Bio-Based IndustriesLeading the Transition Towards a Post-Petroleum Society
  10. ACCAWelcomes the Start of the New Bulgarian Presidency
  11. Mission of China to the EUPremier Li and President Tusk Stress Importance of Ties at ASEM Summit
  12. EU2017EEVAT on Electronic Commerce: New Rules Adopted

Latest News

  1. Middle East, Messi and missing MEPs on the agenda This WEEK
  2. Instagram and Google Plus join EU anti-hate speech drive
  3. EU wants 'entrepreneurship' in education systems
  4. UK loses EU satellite centre to Spain
  5. Pay into EU budget for market access, Macron tells May
  6. Ethiopian regime to get EU migrants' names
  7. EU to lend Greece up to €7bn more next week
  8. Nato prepares to take in Macedonia

Stakeholders' Highlights

  1. European Jewish CongressChair of EU Parliament Working Group on Antisemitism Condemns Wave of Attacks
  2. Counter BalanceA New Study Challenges the Infrastructure Mega Corridors Agenda
  3. Dialogue PlatformThe Gülen Community: Who to Believe - Politicians or Actions?" by Thomas Michel
  4. Plastics Recyclers Europe65% Plastics Recycling Rate Attainable by 2025 New Study Shows
  5. European Heart NetworkCommissioner Andriukaitis' Address to EHN on the Occasion of Its 25th Anniversary
  6. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology
  7. UNICEFMake the Digital World Safer for Children & Increase Access for the Most Disadvantaged
  8. European Jewish CongressWelcomes Recognition of Jerusalem as the Capital of Israel and Calls on EU States to Follow Suit
  9. Mission of China to the EUChina and EU Boost Innovation Cooperation Under Horizon 2020
  10. European Gaming & Betting AssociationJuncker’s "Political" Commission Leaves Gambling Reforms to the Court
  11. AJC Transatlantic InstituteAJC Applauds U.S. Recognition of Jerusalem as Israel’s Capital City
  12. EU2017EEEU Telecom Ministers Reached an Agreement on the 5G Roadmap