Greece seeks bailout extension with new reform plan
Athens
GREECE'S new anti-austerity government submitted a preliminary list of reform proposals to Brussels on Monday in a bid to secure a four-month extension to its lifeline debt bailout, a European source said.
If the measures fail to win the approval of Greece's EU creditors, the country's safety net will collapse on Saturday leaving the government at risk of running out of cash, a run on banks and even a eurozone exit.
Eurozone finance ministers will discuss Greece's list of reforms, in a telephone conference on Tuesday, a spokesman for the German finance ministry said.
"The institutions (ECB, European Commission and IMF) will look at this list first, as agreed on Friday, and then give their opinion on it and on this basis there will be a discussion among the Eurogroup ministers. . ." said Martin Jaeger on Monday.
But hard-left Prime Minister Alexis Tsipras, whose Syriza party swept to power in elections last month, could also face a voter backlash if he fails to deliver on promises to ease the pain of ordinary Greeks after years of swingeing government spending cuts.
In the latest in a series of dramatic showdowns over Greece's 240-billion-euro (S$370 billion) bailout, new Finance Minister Yanis Varoufakis secured the extension from his 18 fellow eurozone partners in Brussels on Friday. The tentative agreement boosted global markets as fears eased of a "Grexit" or eurozone exit - which could have highly damaging wider ramifications - and stocks mostly rose in Asia and Europe.
The deal however came with the proviso that Athens provide by Monday a list of measures to quash concerns, not least in powerhouse Germany, that Greece might backtrack on its commitments to cut spending and pass reforms.
"Europe has some breathing space, nothing more, and certainly not a resolution," German Foreign Minister Frank-Walter Steinmeier told the Bild daily on Monday. "The fundamentals - namely assistance in exchange for reform - must remain the same." In Berlin, a finance ministry spokesman said the list needed to be "coherent and plausible".
Mr Tsipras, 40, has vowed to end the "humiliation" and "vicious circle" of the spending cuts demanded by Greece's creditors in return for two massive bailouts since 2010.
He wants to use the next four months to draw up a new reform package that puts the country - where one in four people is out of work - on a fairer road to recovery after years of recession, spending cuts and state job losses.
But the tough negotiating stance of Germany and other eurozone countries has obliged him and his finance minister Mr Varoufakis, 53, to give ground. Athens pledged to refrain from one-sided measures that could compromise fiscal targets and had to abandon plans to tap some 11 billion euros in leftover European bank support funds.
The source in Brussels said the list received on Monday was "not definitive". Others said that Brussels and Athens were in regular communication and seeking to finalise the document by a midnight (2300 GMT) deadline.
Once the European Commission, the ECB and the IMF - the "troika" of Greece's creditors - approve the list, the extension can go ahead. Certain European parliaments also need to give the green light. But if the proposals are not approved, it will be back to the drawing board and yet more drama for Greece, which is struggling under a 320-billion-euro debt mountain. AFP
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