Greece bailout: Government 'delays reform plan deadline'

  • 23 February 2015
  • From the section Europe
Street vendors in Athens, 23 February Image copyright Reuters
Image caption Greeks have seen their living standards drop sharply during the debt crisis

Greece will send a list of reforms aimed at securing a bailout extension to EU partners on Tuesday morning, missing a Monday deadline, officials say.

The list must be approved by international creditors to secure a four-month loan extension.

Analysts say the deal's collapse would revive fears Greece will exit the euro.

Minister of state Nikos Pappas says the list will include measures to fight tax evasion and trim the civil service.

But Greek officials have also stressed that there will be policies aimed at fulfilling pre-election pledges to help those hit by years of economic crisis.

Greece's creditors - the European Central Bank, the European Commission and the International Monetary Fund - are expected to deliver their verdict on the proposals later on Tuesday, before the reforms are discussed in a conference call with eurozone finance ministers.

Greece agreed an extension to its financial rescue programme with eurozone countries on Friday, and said it would submit its list of reforms before Tuesday.

Late on Monday, officials said that although Greece had given no reason, the Eurogroup had agreed to a delay.

The four-month extension deal is widely regarded as a major climb-down for Prime Minister Alexis Tsipras, who won power in January vowing to reverse budget cuts.

Analysis: Mark Lowen, BBC News, Athens

Image copyright Reuters
Image caption Greek Finance Minister Yanis Varoufakis (right) will have to convince his German counterpart, Wolfgang Schaeuble, pictured here earlier this month in Berlin

Greece hasn't disclosed why the infamous list has been delayed but insists it will arrive in Brussels on Tuesday. Drafts leaked to the Greek media suggest proposals broadly fall into three categories: tackling tax evasion, structural reforms and social measures that help the poor with healthcare or electricity bills and prevent those in debt from losing their homes.

It's not clear which will make the final list or whether the reforms will be accepted by Greece's creditors. If there's a fundamental disagreement, the deal to extend Greece's loan could collapse.

The government is likely to be forced into U-turns on some promises made before the election, such as raising the minimum wage or rehiring public sector workers.

The hard left of the governing party is opposed. But the majority of Syriza's supporters appear to be behind it, relieved at least that Athens is proposing reforms for the first time rather than being handed a fait accompli by its creditors.

'Long road ahead'

A spokesman for the German finance ministry, Martin Jaeger, was quoted as saying by Reuters news agency that Berlin expected the Greek plan to be "coherent and plausible".

Greek Finance Minister Yanis Varoufakis has said the bailout agreement will be "dead" if the list of reforms his government is drafting is not approved.

Bild, Germany's biggest-selling newspaper, broke down in an article (in German) what it said was a tax hit list devised by the Greek government.

It will reportedly seek to raise 2.5bn euros from the fortunes of rich Greeks, 2.5bn from back taxes owed by individuals and businesses, and 2.3bn from a crackdown on tobacco and petrol smuggling.

Image copyright Reuters
Image caption The new Greek government, led by Prime Minister Tsipras, was elected by promising to reverse austerity

In effect, the deal has kicked down the road some of the more difficult issues, like the future sustainability of Greek debt, the BBC's Chris Morris reports from Brussels.

For now the focus is on steadying the ship, and trying to produce an interim plan, he adds.

On Friday, German Finance Minister Wolfgang Schaeuble stressed that there would be no payment of new funds to Greece until the conditions of the deal had been met.

Mr Tsipras said in a televised address the following day that his government had "won a battle, not the war".

He called the deal an "important negotiating success" but warned that there was a "long and difficult road ahead".

Greek economy in numbers

Image copyright AP
  • Unemployment is at 25%, with youth unemployment almost 50% (corresponding eurozone averages: 11.4% and 23%)
  • Economy has shrunk by 25% since the start of the eurozone crisis
  • Country's debt is 175% of GDP
  • Borrowed €240bn (£188bn) from the EU, the ECB and the IMF

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