Thursday night and before the deadline expired, Greece sent its proposals to the creditors, proposals that will form the basis for negotiations for a loan from the European Stability Mechanism. Roughly estimated, the Greek government offered measures (“prior actions”) worth €12-13billion for an ESM loan worth €53billion for the from 1. July 2015 until 30. June 2015. The accompanying letter mentions the necessity that “creditors will make a commitment for Debt Relief/Debt Restructuring.”
Generally speaking, the 10 pages “prior actions” contain several austerity/revenues increasing measures, that are partly based on the revised Proposal of the European Commission from June 30th 2015 with the addition of Greek proposals.
Primary Surplus:
2015: 1%
2016: 2%
2017: 3%
2018: 3.5%
Austerity and structural reforms – Key issues
Taxation:
reduction of Value Added Tax on the islands ot be scrapped, reduction to remain in remote islands
23% V.A.T. in restaurants, 13% in main food items, energy, hotels, water
Increase in “solidarity tax”
100% payment in advance of tax for businesses
30% tax on E-gaming (VLT)
Poverty Allowance to low-pensioner (EKAS): scrapping for 20% of those eligible with “higher income” as of March 2016, gradual scrapping as of end of 2019.
Pensions: cuts totaling 2.7 billion euro within the next 18 months; scrapping of early retirement with exceptions for some vulnerable society groups; “zero deficit clause”.
Public Sector: unified payroll, entrance salary €586 gross [so much as minimum wage in private sector
Farmers: gradual scrapping of fuel subsidiary
Market:
Open shops on Sundays – Opening of closed professions – OECD tool kit
Privatizations:
Proceed with privatization of regional airports, Greek Railways, Old Athens Airport “Elliniko”, Piraeus and Thessaloniki Ports, and others
Transfer of OTE shares package to Privatization Agency
For more details on Greek Proposals as posted in Greek media: check here and here in Greek. Here is the accompanying explanatory document to Greek MPs – 20 pages in Greek.
On Friday, the government will seek the authorization of the Parliament to negotiate the Greek proposals with the creditors. The heavy load of 13- billion euro austerity measures has apparently created tension within SYRIZA Parliamentary group with the Left Platform to have serious objections. Lafazanis’ fraction has 4 ministers in the cabinet.
Discontent is also within junior coalition government partner Independent Greeks (ANEL) that seems to mainly disagree on the Value Added Tax status on the islands.
On Friday morning, rumors come and go and get dismissed later.. The claims have it that the Left Platform and ANEL will not approve the Greek Proposals and that they may even abandon the government. However, the Proposals were apparently approved by the Cabinet before sent to the Creditors.
Divided is also the block of Referendum NO-voters with some of them urging the government to “go to rupture with creditors”, while others insist that they did not authorized the government “to go to rupture” and “Tsipras should reach an agreement with creditors at any cost.”
A friend, a NO-voter, was telling me this morning: “The state and the citizens are broke: better austerity than Grexit and return to Drachma.” And then he added in the good old Greek way “We can see later what we can do…”
The voting in the Parliament will take place later on Friday. The ratification of the bill will take place after the agreement.
The Eurogroup is scheduled to decide tomorrow Saturday whether it accept the Greek proposals or not, a EURO Leaders Summit and an EU Leaders Summit are scheduled for Sunday afternoon. The EURO Leaders will decided whether conditions are filled to start negotiations with Greece for a third “bailout”. If they reject the Greek package, the EU Leaders will have to decided whether to send Greece to “outer space.”
Even if all EU groups, leaders & leaders agree with the Greek proposals, there will still be a long way to go for the final agreement with creditors. According to Greek media, it might need a month or so.
PS We might end up having an agreement with creditors and a new government with SYRIZA in new constellation and different coalition partners?
For now I cannot see how Lafazanis will accept all these privatizations, to start with…
Sorry but at this point, I don’t understand the relentlessness of the Greek government (and the Greek people!) to stay in the euro. Is this a religious thing? Because it has no economic justification whatsover.
It has economic justification. Most economists agree that Greece should not have entered the euro, but the costs of leaving it are horrendous. It would be another catastrophe on top of 5 years of horror, 10 days of cashless banks, and increased uncertainty of the future — making the new currency worthless.
A forced exit would be catastrophic. I’m talking of an ordered one, which was apparently proposed to Varoufakis by Schauble (cf the mediapart article: “how much do you want to leave the €?”). If this conversation really took place, I can’t understand why the idea of leaving a currency that Greece should never have adopted in the 1st place is such a bad thing (or a worse thing that endless austerity)
When asked “how much he wanted to go out of the €”, Varoufakis should have made sure that banks were going to be ok, ask or whatever debt cut Schauble would have been ready to offer and be done with it. Instead, Greec will keep the € at a price of even more austerity, which means even more years of misery and even more destroyed life. WHY?
That’s the result of a blockade and a 14-days-Grexit that was brutal like the embargo on Iraq but much more effective.
Because EU public servants all want cheap houses on Greek islands and with the new VAT on islands everybody who can’t find a slavery-job in terrorism has to leave and empty the islands for this new master-race and as these “Europeans” and other herrentourists need also slaves on Sundays the shops will have to open.
Aman re giaourti! ELEOS!
Congratulations to both the Greeks and the debtor nations. The former have opted for an austerity terror without an end, the latter a never-ending Greek problem.
Thank God the Swedish voters were cleverer than the Swedish politicians and voted no to the euro. So far that has kept us out of this mess.
To be fair to Greece, the current government has fought long and hard to avoid this. They have no option other than a catastrophic GRexit — with banks empty, no currency to replace the euro, and the economy now in freefall. This is an emergency situation, as the Troika deliberately created in order to blackmail the Greeks into surrender.
But the perverts are getting even more pervert and want adjustment to the situation they have created by illegal stopping of ELA and stealing all Greek banks and companies in the Balkans
I totally agree with this.
BUT… couldn’t this be seen at least few weeks ago and to agree to less bad?! What was the point of referendum at all?!
I really think that all this was a veeery bad negotiation tactic from our side, where Cipras/Varoufakis tried to play poker with open hands, although to everybody was obvious that we have lower hand and the government was simply lying to us all the time that this is not the case. And all the time with all that arrogant attitude trying to impress don’t know whom.
At the end we will just pay a price of 4-5 billion euros more, and with total distrust in banks (my assumption is that they simply cannot open banks soon, even if we sign this, because people will just rush to take what they couldn’t)
Very very sad… if I am Cipras I would resign after this. And I am sorry that Varoufakis just got away with all this mess that he created, and that he can preach after like he wouldn’t sign or whatever other nonsense.
May be it helps to understand what happens if one reads the interview from inside the negotiations called “we underestimated their power”
by Christian Salmon
“…We went to a war thinking we had the same weapons as them. We have underestimated their power […] It’s a power that enters the very fabric of society, the way people think. It controls and blackmails. We have very few levers. The European edifice is already Kafkaesque.”
No need… cause I have never said that those are good guys up there in Brussels and that mercy and compassion are one of their virtues. Quite the opposite!!! I am just realistic and understand that we don’t have any other (better) choice then to work with them.
Those guys are not only rulers of the EU, but (with few others) rulers of the world we are living in… and if somebody would just takes a look how this world is now (Ukraine, Syria, Somalia, Tunisia etc etc) he can realize that it is far from perfect.
But this was then another issue in our tactics… that our government lived in some fairy-tale and thought otherwise (that they are nice gentlemen and that they just couldn’t wait to be lectured by professor Varoufakis).
You don’t like to read it but may be you like to translate it into Greek
@m&m I absolutely share your sentiment. It is very much the same deal that could have been signed on June 26. Instead, 2 weeks were lost, and who knows how many more weeks will be lost until the banking situation (and economic situation more broadly) gets back to normal. Capital controls in the middle of the tourist season will have impact on the tourist industry measured in the billions. Then there is reputational cost for Greece from defaulting to the IMF… And the list goes on and on…
Moreover, the approval of the agreement on the creditor’s side is much more questionable now. The money available under the second program is gone. The deal is less credible now: due to the shrinking Greek economy achieving the same primary surplus might require even more austerity measures. The trust in the Greek government is also gone (to the extent it existed) and even the trust in Greece is much lower across the EU.
However, I do not expect Tsipras to resign. He is the only winner (politically) from this sequence of events. After the referendum he is the master of Greek politics. He clearly is able to play the Greek voters like violin. He is benefiting rather than paying the price for his amateurish and erratic actions.
“Defaulting” to the IMF can take up to 2 years, Greece paid back to IMF 40 billion Euro
read today’s proposal and compare them with those by creditors and Greece in June. then find the differences. But that’s a huge load of work, much tougher than using the comments section of a blog to sing the same litany-songs again and again since March and thus free of charge.
Gone program money is only 5.3 may be less, depends on IMF, the rest Greece already refused to take in spring – 10.9 billion – or are profits from Greek bonds that may be belong to Greece anyway. Btw, Giorgos Doras writes in Voria something very interesting about two already existing currencies and the end of real money, so if he’s right the impact of the EU-embargo on Greece wasn’t that fierce, in fact an embargo on a country that had no military activity to justify anything and this, “my friend EU” some “liberals” in the US will really hate.
Without being completely familar with the political scene in Greece it is difficult to give a proper advice. However, in hindsight it appears that it would have been better for Syriza to already early in the year discuss with the two main creditors IMF and Germany (not the Eurozone as such) whether they would have been interested in helping Greece to an ordered GREXIT. If that had been the case, and once a proper program had been organized then a referendum on that issue.
There comes a point whre what you’re getting is no longet worth the price of having it. Why agreement at all costs? This is worse that what they were asked two weeks ago. Are the people so enamored with the ‘prestige’ of being in the euro theat they will sell their souls? Even Greeks I apoke to just before the referendum, said, “Trust me, we don’t want to go back to the drachma.” Why? I would have told the creditors to stuff it months ago. I’m very dissillusioned right now.
Just one point why it’s an illusion that the Drachma would bring competition: Most tourists Greece would have to compete for all want their standard food and beverage and all this has to be imported, makes it more expensive and only the big companies from abroad with their all inclusive shit will profit as they “import” their own stuff and bring it directly from the wonderland of the discounter-mafia.
Anyway Greece is prepared for a no, as the troika-institutions tried to kick Greece out of the Euro-zone since the elections campaign started in Nov/Dec (or even since 5 years) …
I wrote in “Two citizens appear…” on this site:
“Markus says:
July 1, 2015 at 6:49 pm
The more I think about it, the less I understand. There was a meeting on Friday. The EC publishes the most recent version on Sunday. On Monday the Greek government publishes a document with less favorable terms to be voted upon. So they want the Greeks to vote OXI, so that they afterwards can agree with the Eurozone on the already public “EC proposal” and declare victory?”
The answer is yes (which is good for Greece).
ok. so the consensus here is that everybody is disappointed!
all of this noise for a ‘better deal’?
Maybe we should just wait for the Eurogroup to say their thing. In any case, the German Finance minister will not be happy until Greece capitulates fully to its orders and mandates. The dark suits of the EU are dying to flex their EU muscles on Greece’s Tsipras but is anyone listening anymore, the world is much more aware of the true nature of the EU beast as it stalks member state after member state.
I trust Tspiras is getting the best deal for the Greek people but the ball is in the EU court at the moment. The EU and sister organisations have more to lose than Greece if no agreement is reached yet again. Stock markets globally are very fragile at the moment because of this EU-impasse with Greece.
How much longer will this EU-tragedy continue? (letters on a postcard please.
Tsipras is the new Ephialtes. This is a capitulation all around and more than that it goes directly against the OXI in the referendum. This is a new MoU even worse than the ones before, with a “make belief” promise of debt relief that nobody now how much and when it will be implemented.
All left and all patriot greeks must fight with all their strength and by any means against this Treason!
#TsiprasEphialtes
#ExplainNoToTsipras
Greece (Tsipras) has lost this major battle, and it is a significant defeat. It is not a lost war, however: not comparable with Germany’s complete defeat and humiliation in 1945.
In my person opinion (as a non-Greek) the best option is to concede for the moment, and plot to undermine the German control of the eurozone. If that proves impossible, Greece can plan to exit the euro under more favourable conditions: now would be a catastrophe as bad as 1922.
and one more thing –
i think we now know why the varufak left the government…
“We went to a war thinking we had the same weapons as them. We have underestimated their power […] It’s a power that enters the very fabric of society, the way people think. It controls and blackmails. We have very few levers. The European edifice is already Kafkaesque.”
mediapart.fr
Tsipras lied again. Why did you greeks bother to vote? Greece will never be allowed to leave the EU. If only Golden Dawn was in power.
Dumb greeks.
Ireland, Ciprus, Greece…
Looks like one at a time does not work.
Remembering the parable of the seven wickers.