Kick the can: Greek style

Greek Finance Minister Yanis Varoufakis submitted his government’s list of reforms to the Troika — the EU, the ECB and the IMF — by the original deadline.

Like a high schooler getting their homework in on time, Greek submitted its “reform”list on Monday night.

The reforms included doing its chores, promising to walk the dog if the EU allows it to have one and coming home by curfew.

Basically Greece has said it will change without outlining any specifics on how it will change.

EU finance ministers will give Greece a stern look, saying the “reforms are a fresh start, but need specifics.”

“In the commission’s view, this list is sufficiently comprehensive to be a valid starting point for a successful conclusion of the review, as called for by [eurozone finance ministers],” the official said. “We are notably encouraged by the strong commitment to combat tax evasion and corruption,” the Wall Street Journal reported.

This will allow them to kick the can down the road and extend payments for 6 months before they run out on Saturday while the Greek government enacts further austerity monetary policies — which Greek Prime Minister  Alexis Tsipras swore it would not do.

This measure is not a solution in its existing form. The Greek people will say it’s too draconian, the Troika will want to extract further pound of flesh in the near future.

However it will get all parties past the March 1st deadline and that is truly all they want to do at this point.

Below are some key proposals summarized by Bloomberg:

  • Greek promises to overhaul tax administration, public finance management, spending, social security reforms, banking and non-performing loans
  • Greece promises not to roll back already completed state asset sales; safeguard provision of basic public goods, services by privatized firms, industries
  • Govt to review privatizations not yet launched, improve terms to as to maximize state’s long-term benefit
  • Greece commits to adopt amendments to its organic budget law, take steps to improve public finance management, according to a draft document, listing  commitments in exchange for an extension to its bailout
  • Greece also commits to establish a closer link between pension contributions and income, eliminate loopholes and incentives that give rise to an excessive rate of early retirements throughout the economy
  • Greece also commits to strengthen independence of General Secretariat of Public Revenues through further legislation, and prevent all sorts of interference
  • Greece commits to consolidate pension funds to achieve savings
  • Greece commits to phase out nuisance charges in a fiscally neutral manner
  • Greece commits to removing barriers to competition based on input from the OECD
  • Greece commits to align gas and electricity market regulation with EU good practices and legislation
  • Greece commits to phasing in new approach to collective wage bargaining that balances the needs for flexibility with fairness

Nary a number or specific in the list, so we will revisit this perhaps as soon as late May early June, when a new “Greek Spring” — along the lines of the Arab spring — takes hold in a few months.

It will not be pretty, but that’s for another time. Kick that can again.

 

 

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