Breaking: Greece submits new proposal to European Commission. Tsipras red lines crossed?

Via Reuters…

The European Commission has received a new proposal from Greece for reforms that could unlock new funding from the cash-strapped country and is now assessing it, an EU official said on Tuesday.

The proposal was originally due last Thursday. It is to bridge the remaining differences between Athens and its international creditors on issues like pension or Value Added Tax reform.

Early reports indicate that the new proposal is a document split between dealing with fiscal measures and covering funding gaps.

An EU official has just told Bloomberg that the new proposal is a “vague rehash” of earlier Greek plans. The official is questioning how credible it really is.

Via Ekathimerini…

Kathimerini understands that Athens is focussing its attention on adjusting the fiscal measures it proposed with the aim of getting closer to the revenue target set by lenders. However, the coalition is reluctant to adjust its VAT proposal, which sees three brackets (6, 11 and 23 percent) rather than the two proposed by lenders (11 and 23).

Greece also seems prepared to raise slightly its primary surplus proposals from 0.6 percent of GDP this year and 1.5 percent next year. The institutions proposed 1 percent for 2015 and 2 percent for 2016. The updated suggestion from the Greek side is not expected to reach these targets.

While Athens is prepared to change the law regarding early retirement, saving 100 million euros, it does not seem willing to go as far as lenders are demanding in terms of pension reform. There are also substantial differences between Greece and its creditors on the issue of labour market regulations.

The updated proposals are expected to be discussed between Greek officials and representatives of the institutions over the next few days, ahead of a meeting between Prime Minister Alexis Tsipras, German Chancellor Angela Merkel and French President Francois Hollande in the Belgian capital on Wednesday.


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