9 Feb 2015

Greek government poised to ‘extend’ troika deal?

Citing finance ministry sources, the website Left.gr  have put detail into what they believe the Greek finance minister Yanis Varoufakis has proposed to the Eurogroup:

A bridge agreement until the end of August, and a decisive final deal between Greece and its partners on 1 September.

A replacement of 30 per cent of the “toxic” commitments of the memorandum – mainly labour related – with 10 new reforms proposed by the Greek government, in collaboration with the OECD.

A pensioners’ insurance scheme will not be included in these reforms.

Reduction of primary surplus goal from 3 per cent of GDP to 1.5 per cent.

Immediately tackle the humanitarian crisis (i.e. Greek government is allowed to stick to its anti-poverty programme).

The government insists on the immediate payment of the sum of 1.9bn euros from Greek bonds owned by the ECB, and allowing the Greek government to issue 8bn more in Treasury bills (short term debt), and to keep the ECB’s emergency lending assistance (ELA) flexible (ie not capped), depending on needs.

Critically, according to these sources, the government doesn’t mind calling this agreement a “technical extension” of the previous programme.

That is, to be clear, the deal with the troika it previously repudiated.