France hails Greek proposal
PARIS/ATHENS: French President Francois Hollande said yesterday that Greece’s latest offer of belt-tightening measures in return for a three-year loan were serious and credible.
Indicating his support for the Greek government, Hollande reinforced his position as a political ally of Prime Minister Alexis Tsipras’ Syriza party ahead of weekend meetings in Brussels that will set the course for Greece’s financial future.
“The Greeks have shown their determination to remain in the euro zone,” Hollande said, adding that “everything must be done to reach an agreement, a good agreement, an agreement that is respectful of European rules but also respectful of Greeks.”
France’s role in the negotiations has often been set against Germany’s harder line, and daily Le Figaro revealed recently that 10 officials from the French Finance Ministry had been deployed to help Greece’s new finance minister, Euclid Tsakalotos, come up with solutions to the country’s stand-off with its creditors.
Greece’s proposal was submitted to Brussels late Thursday, as part of a plan to support their request for a three-year loan.
According to Greek financial website Capital.gr, the loan request is for €53.5 billion ($59 billion) from the euro zone bailout fund, the European Stability Mechanism (ESM).
The chairman of the Eurogroup of finance ministers, Jeroen Dijsselbloem, confirmed that he had received the Greek government’s proposal, which is now expected to be assessed by the European Commission, the International Monetary Fund and the European Central Bank before being considered by euro zone finance ministers to Saturday.
EU leaders are then scheduled to meet tomorrow, but Italian Prime Minister Matteo Renzi suggested yesterday that the summit might be scrapped if finance ministers close a deal already today.
“We hope not to see each other again on Sunday, which means [there could be an] agreement on Saturday between finance ministers, with no further summits,” Renzi said in Rome after meeting his Irish counterpart, Enda Kenny.
Greece’s latest move is seen as a lastditch effort to keep the country in the euro zone.
In return for more money, Athens is now prepared to accept a series of spending cuts, including a standard VAT rate of 23%, with a reduced rate of 13% for basic food, energy, hotels and water, and a super-reduced rate of 6% for pharmaceuticals, books, and cinemas — in line with the creditors’ last set of proposals.
Greece is also offering to eliminate [VAT] discounts on islands, starting with the islands with higher incomes and which are the most popular tourist destinations, except the most remote ones, according to the proposal. Athens had previously insisted on keeping preferential tax rates for islands.
The new proposal also mirrors the creditors’ last demands on pension reform, eliminating a solidarity grant for hard-up pensioners more rapidly than previously proposed, while introducing measures to keep people in work until the age of 67.
The measures are aimed at achieving previously agreed primary surplus targets of 1,2, 3, and 3.5% of gross domestic product in 2015, 2016, 2017 and 2018, respectively, the document says.