Greece submits new proposal to avoid bankruptcy
Greece submitted its reform plan overnight to its eurozone creditors in a move to try and win new funds and avoid a collapse of its banking system, which remained closed on Friday.
Read more: Greece extends bank holiday
The proposal will be subject to parliamentary vote on Friday to endorse immediate actions, before it is turned over to eurozone finance ministers on Saturday.
In the latest offer, the Hellenic nation asked for €53.5bn to help fund its debt until 2018 in exchange for phasing out tax breaks for its islands and hiking taxes on shipping companies.
Jeroen Dijsselbloem, the Dutch finance minister who chairs the Eurogroup of finance ministers, confirmed having received the proposal, which is said to include a 12-page list of specific reforms.
German finance minister Wolfgang Schäuble commended the new Greek finance minister Euclid Tsakalotos for his “more conventional” approach but urged the Hellenic nation to start putting reforms in place, even before reaching a deal on a new bailout, as a way of rebuilding trust.
That would win an incredible amount of trust
“Just do it. That would win an incredible amount of trust,” Schäuble said at a press conference.
Schäuble also commented that debt relief chances were “very low”, contradicting US Treasury secretary Jack Lew and International Monetary Fund (IMF) head Christine Lagarde who had asked European countries to grant debt relief to Greece and help the country avoid a Grexit.
Read more: US Treasury's Lew and IMF's Lagarde urge EU to avoid Grexit
Deutsche Bank's Jim Reid hoped a deal could be struck, commenting that although the midnight deadline was tested, the Greek proposals were in. “The ball now flips back into the European's court and we await their feedback.”
CMC Markets analyst Jasper Lawler also pointed out that the proposals offered by Athens suggested “ a willingness to meet in the middle” by giving in on a number of creditor demands for reforms.”It’s the closest a deal for Greece has been in five months,” Lawler added.
it is the economics of the madhouse
Rabobank's analysts echoed that the austerity measures proposed by the Greeks were the same rejected by voters in January and again on the country's referendum on the bailout terms. They emphasised that austerity, for an economy in depression, will not help the country and, in addition, “it will cause another huge downturn even if banks reopen: indeed, the goal of a primary fiscal surplus against such a backdrop is not even 'voodoo economics', it is the economics of the madhouse”.
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