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Greece puts final touches on reforms

February 23, 2015

Athens has been dotting the i's and crossing the t's on a new list of reform measures. If European lenders approve its proposal, Athens will be given a loan extension, narrowly avoiding insolvency.

Griechenland Athen Parlament
Image: Reuters/M. Djurica

Greece was expected to submit a fresh list of reform measures to its troika of lenders - the European Commission, the International Monetary Fund (IMF) and the European Central Bank (ECB) - on Monday in a bid to clinch a much-needed loan extension.

Approval by its European lenders would result in their share of the rescue package being extended beyond its February 28 expiration date until June, thus saving Athens from insolvency at the end of the month.

Germany's popular newspaper Bild reported in its Monday edition that Greece's new leftist government was planning tax reforms that would draw in roughly 2.5 billion ($2.8 billion) from rich Greeks and an additional 2.5 billion euros in revenue from the remainder of Greece's tax payers and businesses.

Measures aimed at tackling the smuggling of gasoline and cigarettes would bring in a further 1.5 billion euros and 800 million euros, respectively, Bild reported.

The rush to finalize measures followed a meeting with the eurozone's finance ministers on Friday. They agreed to consider a four-month extension for Athens on the condition that the Syriza-led government not carry out unilateral action that would hurt its fiscal targets, economic recovery and financial stability.

If the Greek government sticks to its commitments, it stands to receive up to 7.2 billion euros in funds still left in its 240-euro bailout package.

Athens under pressure

What Greek Prime Minister Alexis Tsipras and his finance minister, Antonis Varoufakis, praised as progress for his country drew sharp criticism both at home and abroad over the weekend.

One of Syriza's most respected members, 92-year-old war resistance hero Manolis Glezos, blasted the new government for making too many concessions to Brussels.

"There can be no compromise…between a slave and a conqueror, the only solution is freedom," Glezos said on Sunday. "I wish to apologize to the Greek people for taking part in this illusion."

Meanwhile, skepticism emanated from Germany, the most influential eurozone creditor and often viewed as a villain in Greece.

German Foreign Minister Frank-Walter Steinmeier emphasized that Athens had received "a breath of air, nothing more and certainly no (long-term) solution."

An extension to Greece's loans must receive parliamentary approval from some of the eurozone members, including Germany. Reports circulating through the German media on Monday morning indicated that the CSU - the Bavarian sister party of German Chancellor Angela Merkel's Christian Democrats - would vote against an extension unless Athens agreed to strict reform measures.

kms/rc (AFP, Reuters, dpa)