Brussels, 06/05/2015 (Agence Europe) - The day after pointed criticism by Greek diplomats of the 'institutions' (particularly the European Commission and the IMF), the president of the European Commission, Jean-Claude Juncker, and the Greek prime minister, Alexis Tsipras, spoke on the phone on Wednesday 6 May about the issues in question.
A joint statement issued after the conversation says that the two leaders “discussed the importance of reforms to modernise the pension system so that it is fair, fiscally sustainable and effective in averting old-age poverty. They also discussed the need for wage developments and labour market institutions to be supportive of job creation, competitiveness and social cohesion. In this context, they concurred on the role of a modern and effective collective bargaining system, which should be developed through broad consultation and meet the highest European standards.” They agreed that constructive talks should continue at the Brussels Group (the Greek government, the Commission, the IMF, the ECB and EFSF).
On 5 May, the Greek diplomats' widely publicised comments were in sharp contrast to the official line. Greece explained: “The serious disagreements and contradictions between the IMF and the EU cause obstacles in the negotiations and generate high risks. While, until recently, the main argument of the institutions was that the Greek side had not submitted complete proposals, it seems obvious henceforth that not only has Greece presented proposals but it has also made substantial concessions towards a “fair compromise.” As a matter of fact, the divergent strategy of the institutions is generating obstacles. The IMF sets its red lines on reforms, particularly with regard to pensions and labour market, while it seems flexible as far as the primary surplus is concerned.(…) On the contrary, the European Commission has set its red lines on the primary surplus and, consequently, the non-remission of the debt and seems flexible on tough reforms, such as pensions and labour market regulation. As a result, the institutions as a whole seem to have red lines everywhere: Pensions, labour market [IMF] and primary surplus [Commission]. Under these circumstances there can be no compromise. The responsibility lies exclusively with the institutions and their weakness to communicate with each other. In this framework, the Greek government, having realized the glaring contradiction, took the initiative: a) not to table in the parliament its 'omnibus bill', before the prospect of an agreement and b) to put on the negotiations' table the 'day after', that is to say the plan to return to the markets and finance its development from next June onwards.”
The hard line taken by Greece on Tuesday evening does not seem to have damaged the recently improved negotiating atmosphere within the Brussels Group, as the disagreements between the IMF and the Commission have been admitted by several sources at the institutions.
All the same, the three institutions issued a joint press release on Wednesday afternoon, stating: “The European Commission, the European Central Bank and the International Monetary Fund share the same objective of helping Greece achieve financial stability and growth. The institutions continue to work closely together towards that goal. All three institutions are working hard to achieve concrete progress (at the Eurogroup meeting, Ed.) on 11 May.”
Speaking in Paris on Wednesday, the head of Eurogroup, Jeroen Dijsselbloem, said: “Since the last Eurogroup quite a bit of progress has been made ... I'm getting some positive reports from the talks in Brussels. Still lots of issues have to be solved, have to been deepened more, with more details, so there will be no agreements on Monday - we have to be realistic.” Several media report that the sides are close to a deal on VAT, tax collection and privatisations.
If an agreement is not forthcoming, then even with a positive signal from Eurogroup, the ECB would not agree to provide the country with a breathing space by raising the upper limit on the number of treasury bonds the Greek banks can buy from the government. On Wednesday, the ECB was, however, expected to increase the amount of emergency lending it provides to Greek banks, but the governor of the Bank of France, Christian Noyer, warned that this type of aid cannot go on indefinitely.
Without aid from the eurozone, Greece recently paid back €200 million of its loans to the IMF, under the watchful eye of the international media. The institutions seem to believe that Greece will also be able to conjure up the €765 million repayment that is due in a week's time.
According to German newspaper Bild, the 500 richest families in Greece may have a special tax levied on them. The list of Greek reforms includes a raising of the surcharge on salaries of more than €30,000 a year and a rise in the tax on luxury goods. Other reforms on the list include a tax on luxury cruises to the Greek islands, a standardisation of the tax on business turnover and a requirement that credit cards be used for payments of over €70. (Elodie Lamer)