LONDON, United Kingdom. Europe gave a cautious welcome Monday to new Greek proposals aimed at ending a damaging credit crisis that threatens the country’s future in the euro.
Greece needs more money from Europe or it will miss a payment to the International Monetary Fund due next week, setting it on an unpredictable path that could lead out of the eurozone.
Finance officials met in Brussels to review the latest submission from the Greek government, before a summit of eurozone leaders including German Chancellor Angela Merkel later on Monday.
Jeroen Dijsselbloem, who chaired the meeting of finance ministers, said at first glance the proposals to reform the Greek economy and close a budget gap were “broad and comprehensive” but needed a much more detailed assessment.
“It’s a welcome step, and a step in a positive direction,” he told reporters. “It is an opportunity to get a deal this week and that is what we will all work for.”
Greek Prime Minister Alexis Tsipras, who was elected in January after promising to roll back austerity, has spent months resisting the conditions Europe and the IMF are demanding in return for the remaining 7.2 billion euros of the country’s mega 240 billion euro bailout.
But pressure for a deal has been building. Account holders have been pulling billions out of Greek banks because of the uncertainty over the country’s future.
That has left the banks dependent on emergency funds from the European Central Bank, a lifeline that would likely be cut if Greece fails to get a deal soon and defaults.
The ECB agreed again Monday to provide more funds, but is reviewing the situation on a daily basis.
Tsipras sent Europe and the IMF new proposals overnight, appearing to concede ground on two key areas — state pensions and sales taxes.
The Greek government is offering to raise the retirement age to 67, and raise the main rate of sales tax to 23%, while levying lower rates on energy, basic foodstuffs, medicine and books, a European diplomatic source told CNN.
Greece was also prepared to raise the rates of income and corporate taxes, above certain thresholds, according to media reports.
“Our assessment of the reported changes above is that they represent meaningful concessions from the Greek side if they are to be confirmed, bringing them closer to the creditor proposals,” commented analysts at Deutsche Bank.
Credit: CNN
