The Euro Working Group has demanded that the Greek government submits new reform proposals, in an effort to cover the distance and reach an agreement. According to the institutions, the latest Greek proposals are insufficient, particularly with regards to the pension system and VAT reforms. They also argued that the equivalent measures are not guaranteed to have the same fiscal result.
Although the Greek government appears prepared to take the sort of measures that will yield a 1% primary surplus in 2015 and 2% in 2016, it will not do so unless there is immediate debt relief. The Greek side has also rule out pension cuts, preferring instead to carry out adjustments to rectify distortions.
Even if the Greek government were to submit the sort of measures demanded by the institutions, they will not be discussed at Thursday’s planned Eurogroup in Luxembourg. Eurozone financial experts are said to have proposed a further extension of the existing bailout program, however the Greek side underlined that this issue must be examined at the upcoming Eurogroup.
The Greek representative at the Euro Working Group argued that the institutions so far have not responded to the 47-page counter-proposal submitted by the Greek government, while Finance Minister Yanis Varoufakis told Bild that he does not intend to present any new reform proposals at the Eurogroup.
