Greece on Wednesday submitted it's reform plan to EU creditors. The 26 page list of reforms was obtained by the Financial Times' Peter Spiegel. The introduction warns that the European Union project, and that of the common currency, is now in question and urges that the European Union “turn a corner on the mistakes of the past”, stating that “it is now urgent that the books be closed on the past programme with the rapid conclusion of the Final Review, so that Greece and her partners can proceed to negotiate and to launch a new partnership and a new model for development and growth in Greece.”
With a predicted 875 million euros to be raised from an audit of offshore bank transfers and 600 million euros from a 'lottery scheme' to encourage consumers to demand VAT receipts, the government is relying on a concerted effort to tackle tax evasion and fraud to raise much needed cash. Whilst the document makes some concessions to Greece's creditors demands, including an expected 1.5 billion euros in revenue in 2015 from privatizations, including the operation and management of 14 regional airports, the real sticking points in reaching an agreement will be on pension and labour market reforms.
The document includes plans for new expenditure totalling 1.1 billion euros, including 600 million euros for raising pensions, and 326 million to suspend the 'zero deficit clause', which would force additional pension cuts. Greek pensioners took to the streets this week in Athens to protest cuts to their pensions, amid revelations that almost half of Greek pensioners live beneath the poverty line.
In a further nod to the government's commitment not to back down on tackling the humanitarian crisis, the planned reforms will also aim to gradually increase the minimum wage.
The finance ministry predicts that the reforms will increase Greece's primary surplus in 2015 from a baseline of 1.2% to between 3.1-3.9%.
A conference call to discuss the reform plan did not reach agreement to unlock emergency funds, as had been hoped, and negotiations look set to continue throughout April with Greece struggling to meet its scheduled debt repayments. The next Eurogroup meeting of finance ministers is scheduled for 24 April.
The battle for Greece's soul is increasingly being fought in the media, and in the court of public opinion as SYRIZA battle criticism both domestically and abroad. The election of the left leaning party that some describe as radical, and others merely as Keynesian, has certainly been inconvenient for Greece's creditors. They have been accused of irresponsibility and of driving their country towards an abyss, as they strive to challenge the dominant narrative of austerity and address the humanitarian crisis in Greece. As reported by the Guardian, Greek officials have commented that “A campaign of rumour, innuendo and deliberate leaks is being waged against us…They keep saying the Greeks are not well-prepared, they haven’t done their homework, their proposals are vague, all of which are grotesque and preposterous lies.”