Greece offered new measures including a tax hike on shipping companies and scrapping tax breaks for its islands in the latest proposal sent to creditors for a cash-for-reforms deal, as Athens races to win new funds to avert bankruptcy.
The government also plans to raise value added tax for restaurants, roll out pension reforms and to set a firm timetable for privatizations.
In return, Athens wants the creditors to review the primary surplus targets for Greece over the next four years and wants funding worth 53.5 billion euros to cover its loan obligations until the end of June 2018.
In the meantime, the Greek government will seek a parliamentary vote tomorrow to endorse immediate reform commitments it is offering euro zone creditors.
A Greek official said lawmakers would be asked to authorise the leftist government to negotiate a list of so-called «prior actions» it must take before aid funds are disbursed, a key step to convince sceptical lenders of its serious intent.
The announcement came as Prime Minister Alexis Tsipras prepared to send a detailed reform plan to the head of Eurogroup finance ministers before a midnight deadline in hopes of winning a deal to prevent a looming bank collapse and stay in the euro.
Greek banks have been closed since June 29, when capital controls were imposed and cash withdrawals rationed after the collapse of previous bailout talks.
Germany, the biggest creditor, meanwhile took a small step towards Athens by conceding that Greece will need some debt restructuring as part of a proposed new three-year loan programme to make its economy viable.
The admission by German Finance Minister Wolfgang Schaeuble came hours before a midnight deadline for Athens to submit a reform plan meant to convince European partners to give it another loan to save it from a possible exit from the euro.
Greece has already had two bailouts worth 240 billion euros from the euro zone and the International Monetary Fund, but since the crisis started its economy has shrunk by a quarter, unemployment is more than 25 percent and one in two young people is out of work.
Schaeuble, who makes no secret of his doubts about Greece’s fitness to remain in the currency area, told a conference in Frankfurt: «Debt sustainability is not feasible without a haircut and I think the IMF is correct in saying that.
But he added: «There cannot be a haircut because it would infringe the system of the European Union.»
He offered no solution to the conundrum, which implied that Greece’s debt problem might not be soluble within the euro zone.
But he did say there was limited scope for «reprofiling» Greek debt by extending loan maturities, shaving interest rates and lengthening a moratorium on debt service payments.
Schaeuble also complained that he had not seen any sign of «prior actions» by the Greek government. Friday’s vote should go some way towards disarming such criticism, although a further vote will be required to turn the «prior actions» into law next week if an agreement is reached, the Greek official said.
Source: Buenos Aires Herald