Greece and its creditors bring reforms to table

Chris Papadopoullos
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EUROZONE officials will discuss two sets of Greek reform proposals today in a bid to finally wrap up more than four months of negotiations over the embattled country’s future.

Greece and its creditors are looking to finalise a cash-for-reforms deal to keep the state from going bankrupt in the coming weeks. Between now and 19 June, it owes €1.6bn (£1.2bn) to the International Monetary Fund (IMF), starting with a €300m bill due Friday.

One set of reforms was sent from the Greek side to Brussels on Monday night, Prime Minister Alexis Tsipras said yesterday.

City A.M. understands that Greece has made some further concessions in a bid to break the deadlock. One official said they were offering to raise VAT immediately, a measure that finance minister Yanis Varoufakis had wanted to delay until September to avoid hitting the tourist industry.

But the official told City A.M. that hotels could be excluded from the discounted VAT rate of 6.5 per cent and moved on to a rate of either 11 per cent or 23 per cent.

Greece has also offered to delay hiking the minimum wage back to its pre-recession level.

The new proposals drawn up by the Greek government and a new draft of proposals drawn up by creditors in Brussels will be discussed in a meeting of deputy finance ministers today, at a so-called Euro Working Group meeting. It is likely to be a teleconference.

If enough agreement is made, it opens the door for a meeting of Eurozone finance ministers, called a Eurogroup, which is the final hurdle before an extra €7.2bn can be released to Greece.

If the country misses Friday’s payment to the IMF, it enters a grace period where it has 30 days to eventually cough up. For this reason, Greece’s deadline for a deal is now said to be 30 June when its current cash-for-reforms bailout expires. If this happens, Greek banks could lose vital financial support from the European Central Bank.

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