Brussels, 10/07/2015 (Agence Europe) - On Friday 10 July, the institutions (European Commission, ECB and IMF) got down to assessing the reform proposals submitted by Greece on Thursday in order to brief Eurogroup on whether they are sufficient to open talks on a third aid programme. On Friday morning, international media reported on the proposals as marking a capitulation by the Greek prime minister, Alexis Tsipras.
Eurozone reactions range from caution to optimism. Several countries are awaiting the view of the institutions, but some positive, or more cautious, comments have already been made. French president François Hollande, who is now reported to be personally involved in management of this crisis, said that the Greek programme was serious, credible and demonstrated a determination to remain in the eurozone, but tweeting that everything was possible but nothing had been done yet. The head of Eurogroup, Jeroen Dijsselbloem, was more cautious, stating that Athens' proposals were a “thorough piece of text,” adding: “Broad support in Greece gives it more credibility, but even then we need to consider carefully whether the proposal is good and if the numbers add up. One way or the other, it is a very major decision we need to take” on Saturday 11 July. Malta's prime minister, Joseph Muscat, said: “At first glance, the Greek proposals provide a basis for discussion,” but Italian prime minister Matteo Renzi said he was more optimistic. Slovakian finance minister Peter Kazimir said: “It seems we have progress on Greece. It's still not clear whether this will be enough.”
The leader of Greek opposition party To Potami, Stavros Theodorakis, had a meeting on Friday morning with the president of the European Commission, Jean-Claude Juncker. Theodorakis told Greek media that Juncker had told him that the Greek proposals were a good basis, information that the European Commission refused to confirm. Feelings were not so euphoric in Athens. Opposition party New Democracy expressed support for Tsipras, but energy minister Panagiotis Lafazanis said “the proposals are not compatible with the Syriza programme.” The Greek parliament is due to vote on the proposals on Friday evening.
The Greek proposals. The text submitted by Athens on Thursday evening is very similar to the most recent European Commission proposal that was voted against in the Greek referendum. Greece is requesting a three-year €53.5 billion aid programme. The budget surplus objectives will be kept (including the one for 3.5% in 2018) but Greece says it is open for talks about how to achieve them in the light of deteriorating economic circumstances. Changes to VAT should generate income of 1% of GDP a year. The reductions in VAT for the Greek islands will be gradually phased out by 2017, starting with the richest in October 2015 (apart from the most remote). VAT will be set at 23% (including for catering) with a reduced rate of 13% on staple food products, energy, hotels (in October) and water, with a mega-reduced level of 6% for medicines, books and theatres. Greece is planning to phase out the 'EKAS' welfare benefit for pensioners by December 2019. Athens is offering to reduce military spending by €100 million in 2015 and €200 million in 2016, less than previously planned. The documents submitted by Athens make no mention of reducing the country's debt. (Elodie Lamer)