GREECE last night missed a deadline to submit reform proposals for a new deal on its bailout, but officials said this was due to late exchanges between them and Europe.
Drafts leaked to Greek media suggest the reforms will focus on tackling tax evasion, hiking minimum wage, free electricity and food stamps.
Eurozone finance ministers will hold a teleconference today to see whether the reforms have the potential to lay the groundwork for a new agreement. If approved today it will still require approvals by national parliaments as well as the European Central Bank, International Monetary Fund and the European Commission. This means Greece may not be able to access funding until the end of April, which presents a number of problems.
“The chance of policy mistakes, political volatility and implementation risks remains quite high, and may rise,” said economist Daniele Antonucci from Morgan Stanley. Antonucci highlights three main risks. The government is short on cash and could run into arrears, there is uncertainty over emergency lending to Greek banks, and there could be resistance in Greece.