The European Commission is currently examining a new proposal for an agreement, which it received by the Greek government, claims news agency Reuters. The French news agency has also reported that the new proposal is three pages long.
According to the Reuters report, which cites an unnamed European official, the agreement may unlock new funding for cash-strapped Greece. The proposal is aimed at bridging the differences on critical issues such as the pension and VAT reforms.
At present no details have emerged as to the finer details and content of the new proposal submitted by the Greek authorities.
Official tells Bloomberg new proposal «a rehash»
News agency Bloomberg spoke to two international officials with direct knowledge of the discussions regarding the three-page document. The first official revealed that it was a “rehash” of earlier proposals and only covered fiscal targets.
A second three-page document outlines how Greece will address its financial needs and includes a request to use funds from the ESM to pay off 6.7 billion euros worth of bonds due in July and August. The second official revealed that the EC, ECB and IMF are currently assessing the plan, after receiving it on Tuesday morning.
Further information on the counter-proposal
Corroborated sources reveal that the Greek government has raised the primary surplus target for 2015 from 0.6% GDP to 0.75% (when the institutions demanded a 1% target) and to 1.75% for 2016, with the institutions demanding a 2% target.
Regarding the VAT reform, the government accepts measures aimed at making it more efficient (such as increasing the 11% VAT rate to 12%), but rules out the introduction of 23% VAT on energy. As for the pension system, the government is only considering the abolition of early pensions and has ruled out the abolition of the non-pension solidarity grant (‘EKAS’).
In the new proposal, Greece has also asked for the FSF’s 10.9 billion euros that was intended for the refinancing of Greek banks and which was returned to the EFSF. The Greek side has also asked for the ESM/EFSF to cover the 27 billion euros of bonds held by the ECB, including the 6.7 billion euros due in July and August.
Government sources have underlined that the Prime Minister Alexis Tsipras will present the new proposal to German Chancellor Angela Merkel and French President Francois Hollande on Wednesday’s arranged meeting. The government’s goal is to come to a comprehensive agreement and avoid further negotiations that may keep the Greek economy in a hostage situation.
