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Troika "Happy" With Revised List Of Greek Reform Promises: Full Varoufakis Letter

There was the usual dollop of confusion yesterday, when the dispatch of the Greek list of reform proposals was delayed from Monday to Tuesday, after what in retrospect was the Troika throwing up all over the preliminary, very "broad terms" 3-pager (much like Congress did to the original Hank Paulson 3-page term sheet).


Well, as it appears Greece did actually manage to sneak the revised list through in time just before midnight on Monday, yet another indication that someone was lying becase as the WSJ reported "Dijsselbloem said he received the list of reforms at 11:15 on Monday evening. That means Athens submitted the list in time, despite an announcement by the Greek government on Monday night that it wouldn’t send the measures until Tuesday morning. Greek Finance Minister Yanis Varoufakis also sent the list of reforms to the commission, the ECB and the IMF" aka the Troika, although in Greece "fish has now been renamed to meat."

As a result, as DPA and various other outlets report, the Troika is now "happy" with the Greek reform list. According to the WSJ, the "list of proposals submitted by the Greek government on how to overhaul the country’s economy appears to be in line with the principles set out by Eurozone finance ministers"

However, as also expected, the "bloc’s governments will require more detail on the proposals before giving Greece more money and possibly before approving its extension request."

“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.” However, Jeroen Dijsselbloem, the Dutch finance minister who leads meetings of the eurozone ministers, said the proposals represented “just a first step.”

In other words, once Greece started down the path of concessions merely to obtain a bailout extension, something it swore it would never even contemplate, there is no reason to believe it will end any time soon especially as the threat of a terminal bank run hanging over the head of Tsipras.

So what happens next?

Eurozone finance ministers will hold a phone conference at 13:00 GMT to discuss the measures, Mr. Dijsselbloem said, and, if they pass their scrutiny, approve the extension. That means national parliaments in countries including Germany and Finland can vote on the changes to the bailout program before it expires on Saturday.


The Greek list is six pages long and appears to set out the proposed measures in satisfactory detail, a European official who had seen the document said. Notably, the proposals include measures to “unify and streamline” Greece’s pension policy, the official said—despite resistance from the government in Athens until now to make further changes to its pension system. The government also pledged to fight early retirement, the official said, but also laid out plans to create a “basic income scheme” for early retirees, which would cushion some of the hardship brought on by the changes.

So what are the revised Greek reform promises? Here are some of the 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

Not a single number to anchor any expectation, not a single benchmark, target milestone or timeline. In short, a qualitative bulletin of promises which the Troika will gladly accept just to kick the can for another 4 months now that the Tsipras government has been reduced to a shall, and merely an extension of the Samaras government, having reneged on all its promises to the people.

As for the Syriza government's "mandate", what has happened over the past week is that the new government's list of unfulfillable promises to the Greek people has been replaced with a new list of unfulfillable promises to the Troika.

In other words, back to square one.

Just for the record, here is the letter of more promises Varoufakis sent to the Troika, pardon, Institutions.