ATHENS--Greece submitted a draft list of reform proposals to
creditors on Friday ahead of a crucial meeting of eurozone finance
ministers next week, at which Athens hopes to unlock more financial
aid to avert a growing cash crunch.
The list of seven proposals includes promises to improve
Greece's budgetary procedures and stamp out tax evasion, a senior
government official said, while also tackling what the new
Syriza-led government has described as a humanitarian crisis among
Greece's poor.
The 11-page letter, also suggests a plan for stretching out the
repayment of tax arrears--something Athens hopes will prod indebted
households to pay back taxes--and new rules to regulate and tax
internet gambling, the official said.
Last month, Greece struck an agreement with its creditors to
extend its current EUR240 billion ($263 billion) bailout by another
four months. But creditors are waiting for Greece to give details
of its reform program before they will release any aid.
In the meantime, as cash reserves dwindle, Greece's new
government is scrabbling to meet its debt obligations.
On Friday, Athens met the deadline for repaying the first of
several loan repayments worth a total of EUR1.5 billion to the
International Monetary Fund in March, a senior government official
said, making a EUR310 million payment. Just last week, government
officials had raised doubts over whether the country could meet the
deadline.
The cash crunch, along with ongoing liquidity constraints faced
by Greek banks, makes Monday's Eurogroup meeting crucial.
The government in Athens is hoping that its fresh reform
proposals, which include details on implementation and fiscal
impact, will be well received by eurozone finance ministers.
Earlier this week Jeroen Dijsselbloem, president of the
Eurogroup, dangled the prospect of aid disbursement as an incentive
for Greece to press ahead with its reform program. Although Greece
stands to receive a loan installment of up to EUR7.2 billion from
creditors, it is probable that only a fraction of that amount would
be released by the Eurogroup.
It remains far from clear whether the reforms Greece has
proposed so far will be enough to satisfy the country's most
critical creditors, such as the IMF, Germany and, to some extent,
the European Central Bank.
During its meeting Thursday in Nicosia, the ECB's governing
council decided not to reinstate a special waiver--suspended in
February--that allows Greek banks to pledge junk-rated Greek
government debt as collateral for ECB loans. The ECB has made clear
that reinstatement of the waiver would come only after Greece's
government successfully pressed ahead with reform.
In the meantime, Greek banks have had to rely on a more costly
lending facility provided by the Bank of Greece. That emergency
lending facility, or ELA, must also be approved by the ECB, which
has capped its use. But with Greek banks already pushing up against
that cap, the ECB governing council meeting this week agreed to
marginally raise the cap by EUR500 million to EUR69 billion.
Bank of Greece Governor Yannis Stournaras assured depositors on
Friday that Greek banks were safe. But following a meeting with
Prime Minister Alexis Tsipras, Mr. Stournaras also emphasized that
Greece needed to reach a "successful" agreement with creditors at
next week's Eurogroup meeting.
Write to Nektaria Stamouli at nektaria.stamouli@wsj.com
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