Eurozone ministers have given their approval to Athens’ new economic reform plans, paving the way to a four-month bailout extensionLatest: Deal is approved...but IMF is concerned...as is the ECBRead Greece’s proposals hereDebt crisis inspires new song 3.34pm GMT The Greek stock market has surged by 10% today, to close at its highest level in two and a half months. 3.22pm GMT Reports are filtering through that the atmosphere at the Greek government’s cabinet session this morning was very heavy, with enraged ministers openly objecting to the aid extension agreement signed in Brussels last week. The energy minister Panagiotis Lafazanis, who heads Syriza’s militant Left Faction, emerged from the meeting “seeing red” according to reporters who were there. Syriza’s parlimentary group will now hold an emergency meeting at 8pm (6pm GMT) tonight. 3.09pm GMT Mario Draghi, the president of the European Central Bank, has given his approval to Greece’s four-month bailout extension, but also flagged up concerns in a letter to eurogroup chief Jeroen Dijsselbloem.Dear Jeroen,My Staff has reviewed the list of measures which the Greek authorities submitted yesterday evening. Our initial impression is that the document covers a wide range of reform areas and in this sense, it is sufficiently comprehensive to be a valid starting point for a successful conclusion of the review. However, as we expected it was not possible for the authorities to elaborate on concrete proposals and commitments that can be assessed by the institutions in respect to growth, public finances and financial stability. Given the very limited time available, this is understandable. 3.00pm GMT Back in Athens, the government is trying to calm fears that it has caved into its lenders.“It’s really nobody else’s business how we deal with our finances internally as long as we are keeping balanced budgets.” 2.56pm GMT Christine Lagarde ends her letter with a serious warning -- as things stand, the policy proposals outlined by Greece are not enough to ensure a successful review of its IMF programme (which runs until 2016)Here's link on @FT's website of complete @Lagarde letter to @J_Dijsselbloem on #Greece. Key sentence at page turn: http://t.co/rUcwoWNMAV 2.52pm GMT Once EC/IMF/ECB/Eurogroup have all approved extension, each EZ member needs to sign off. Parliaments in FIN, DE, SK, AU & NL need to vote it 2.52pm GMT The IMF’s concerns probably won’t stop eurozone parliaments approving Greece’s four-month bailout extension, but it’s another sign that the next few months will be tricky for Greece. 2.46pm GMT Hold the euphoria. The International Monetary Fund has written to the eurogroup, criticising elements of the Greek government’s reform plans.Christine Lagarde says that: Whilst the authorities list is comprehensive, it is not very specific, which is perhaps to be expected considered the government is new in office.We note in particular that there are neither clear commitments to design and implement the envisaged comprehensive pension and VAT policy reforms nor unequivocal undertakings to continue already-agreed policies for opening up closed sectors, for administrative reforms, for privatisation, and for labour market reforms.Yikes! #IMF not on board with approval of #Greece list. Excerpt from letter from @Lagarde to @J_Dijsselbloem pic.twitter.com/2nx20p8RV2 2.37pm GMT The European Parliament has confirmed that finance ministers has approved extending Greece’s bailout programme by four months.But, in a brief statement, the ministers also want Athens to flesh out its reform measures.The Eurogroup today discussed the first list of reform measures presented by the Greek authorities, based on the current arrangement, which will be further specified and then agreed with the institutions at the latest by the end of April. The institutions [IMF/ECB/EU] provided us with their first view that they consider this list of measures to be sufficiently comprehensive to be a valid starting point for a successful conclusion of the review.We therefore agreed to proceed with the national procedures with a view to reaching the final decision on the extension by up to four months of the current Master Financial Assistance Facility Agreement.#Eurogroup statement on #Greece, following today's conference call: http://t.co/uj4K8UeTr2. 2.22pm GMT Sky’s Ed Conway says that the eurogroup wants Greece to make some changes to its reform programme, and we might get the details later... Eurogroup teleconference lasted abt an hour. Hearing there's likely to be amendments to reform list. Greek fin ministy to announce them soonEuro zone finance ministers have approved Greece's reform plan so paving the way for Greece to receive a further tranche of bail-out funds 2.13pm GMT I've had confirmation from my own EU sources. #Eurogroup has approved Greek list of reforms. Teleconference ended a moment ago 2.12pm GMT IT’S OFFICIAL. The eurozone finance ministers have approved Greece’s four-month bailout extension, after a one-hour conference call in which they scrutinised Athens’ reform programme.Valdis Dombrovskis, commissioner for the euro, tweets the news:Following #Eurogroup teleconference decision national procedures for extension of the Greek programme can begin #Greece* Greek Finance Minister official says Eurogroup approves Greek reform plan - RTRS 2.06pm GMT The Slovakian finance minister’s media team has tweeted that the Greek bailout deal “holds”.They add that the eurozone is eager to see firm details on Athens’ plans in the weeks ahead.#eurozone deal with #Greece reached on Fri holds. Greeks have lots of heavy-lifting to do until end-April. We all want to see numbers now. 2.02pm GMT Crisis delayed, but perhaps not denied?Crisis averted, until, like April. (BN) *GREEK AID EXTENSION SAID TO BE APPROVED BY EURO-AREA MINIS TERS 1.58pm GMT Newsflash from Bloomberg, saying the eurozone finance ministers have approved Greece’s reform package.Greek bailout extension said to be approved by Euro area Bloomberg 1.45pm GMT Our Europe editor predicts a lively few months ahead.... #grexit looks like @tsipras_eu passes first test. loadsa fun to come tho 1.15pm GMT 12.58pm GMT OECD chief Angel Gurria spoke about the Greek crisis in London today:OECD Gurria: "we have been working with Greek govt now for many many years and we are happy to support the new govt" pic.twitter.com/850MbGsLC3OECD Gurria on Greece talks says want to express "hope and support that clearly there should be a convergence" 12.57pm GMT A brief recap.Eurozone finance ministers are getting ready to hold a eurogroup conference call to decide whether to accept a list of economic reforms proposed by the Greek government last night.We are encouraged by the commitment to combat tax evasion and corruption, inter alia through efforts to modernise tax and custom administrations, as well as to pursue reforms to modernise the public administration.The Commission also notes the commitments in the area of statistics and considers it of vital importance that the institutional and operational independence of ELSTAT and its senior management be respected at all times.RT @BrunoTersago Salonica bishop #Anthimos,repeatedly preaching against left-wing political parties,gave his blessing to #Tsipras #Grčija 12.41pm GMT #grexit @eu_comission tells @J_Dijsselbloem 'we are encouraged' by greek reform menu. 'determined swift implementation will be key'. 12.34pm GMT Newsflash from Brussels.... the Commission has digested the long list of reforms emailed by Greece last night (see earlier post) and concluded that they are “sufficiently comprehensive” to pass muster.However, it wants to see these commitments turned into actual actions. 12.29pm GMT Here’s your daily reminder of the debt repayments Greece faces this year:#Greece debt repayments due: March €1.4bn June €1.4bn July €3.5bn August €3.2bn Sept €1.4bn Dec €1.4bn pic.twitter.com/6gp3w2nddt via @ALeipold 12.28pm GMT Life may get harder for the new Greek government when it tries to get its reform plans into law. Joan Hoey, senior analyst at the Economist Intelligence Unit, predicts tough battles in the Athens parliament, which could even bring down Alexis Tsipras’s government.“Syriza is already facing criticism and dissent within its own ranks and may also encounter opposition from its coalition partner, the anti-bailout Independent Greeks. We expect implementation difficulties, given previous strong commitments made by Syriza to reverse previous reforms, stop privatisation, restore the minimum wage, etc, commitments which it has now had to drop.The issues on which the previous government fell—austerity and reform implementation—will not go away. The prospect is therefore for continued political instability in Greece and we forecast that the coalition will not last longer than 12–18 months. We continue to assign a 40% risk to a Grexit”. 12.04pm GMT Greece’s deputy minister in charge of administrative reform has warned that the newly-installed government is ready for a fight – dispelling accusations that the Syriza-led administration is about to conduct a major u-turn. “That is going to be vital to restoring the trust and credibility deficit Greece has suffered.” “high intellectual calibre, secondly they believe in what they are trying to achieve, and thirdly they have the persistence and clarity to continually change what they want so that they arrive at a good result … that is, they are two men who are fighting and struggling. We have to recognise that.” 11.59am GMT 11.56am GMT OECD warns UK must fix productivity problem to raise living standards. Story and key charts from today's report http://t.co/okkyQKNaYJ 11.53am GMT Christmas has come early for chancellor George Osborne. The head of the OECD is congratulating him on the economic recovery, and urging the UK to stick with the current plan.OECD head Gurria: "Britain has a long term economic plan but it must stick with it" pic.twitter.com/0WDw7BnmMfGurria on uk's labour market reforms - "textbook" and "best practice". The love in is getting embarrassing ...Tough talk from OECD head Gurria: “My main message today is well done. Well done Chancellor.” 11.47am GMT Over in London, the Organisation for Economic Co-operation and Development (OECD) is presenting a report on the UK economy.And it’s warning that Britain must fix its productivity problem to secure future economic growth and improve living standards.OECD warns UK must solve productivity problems to raise living standards. Am tweeting from report launch at Treasury pic.twitter.com/Afo45ZSTyHOECD head Gurria says UK labour market performance has been "remarkable", economic growth last year fastest on g7OECD head Gurria: "a swallow does not a spring make but real wages are on the rise" "what a difference effective economic policies can make" 11.34am GMT One man’s sensible compromise is another man’s shameful capitulation, of course. Any deal that is waved through by the eurogroup is likely to fuel criticism from those in Greece who expected Syriza to defy their creditors.Syriza response though will be massive let down to those who wanted Greece to lead a charge to something diff in EZLooks like a solid list of sensible reforms. No wonder Troika happy. Question now is whether Syriza can deliver. http://t.co/Cf07i7j0Er 11.27am GMT The Greek stock market is still soaring, up over 7% today.How stock market reacted to news Greek reform list welcomed in Brussels HT @YahooFinance #Greece pic.twitter.com/YgFC4gq857 11.15am GMT You might find this pdf of Greece’s reform proposals a little easier to read (it’s the same as the version posted earlier).Just got my mitts on pdf of #Greece's 6-page letter to @J_Dijsselbloem on promised economics reforms. Posted here: http://t.co/np0ro8uK9v 11.05am GMT Greece’s reforms plan looks like a sensible compromise between the Greek government’s promises and the demands of its creditors, commentators say.Greek journalist Nick Malkoutzis reckons the pledge to ‘modernise’ pensions could cause ructions:Pensions & privatisations 2 of thorny issues in govt's reform proposals. A lot of other content likely to have broad support though #GreeceThis list will be approved by the Eurogroup, even w reservations. It's much more comprehensive & detailed than what was 'leaked'. #GreeceThe big picture: Greek reform programme well short of Syriza election programme but with important wins for the new government.nothing specific but I *think* "EU/ILO best practice", in the absence of any other comment means Syriza gave up on mass layoff rules"a new, 'smart' approach to collective bargaining" sounds pretty ominous for Greek labour unions, who have never liked either new or smartSo on the important things - minimum wage kicked into long grass, foreclosures they crumbled, pensions they got a bit 10.50am GMT Newsflash: eurozone finance ministers will hold a conference call at 2pm Brussels time (1pm GMT or 3pm EET) to discuss Greece’s plan.#Eurogroup conference call on Greece at 14.00 this afternoon. 10.45am GMT Reuters has now published the full text of Greece’s reforms. At first glance it is broadly as expected -- lot of commitments to reform the tax base, fight corruption, and improve Greece’s public sector. Reform VAT policy, administration and enforcement. Robust efforts will be made to improve collection and fight evasion making full use of electronic means and other technological innovations. VAT policy will be rationalised in relation to rates that will be streamlined in a manner that maximises actual revenues without a negative impact on social justice, and with a view to limiting exemptions while eliminating unreasonable discounts. Modify the taxation of collective investment and income tax expenditures which will be integrated in the income tax code.Adopt amendments to the Organic Budget Law and take steps to improve public finance management. Budget implementation will be improved and clarified as will control and reporting responsibilities. Payment procedures will be modernised and accelerated while providing a higher degree of financial and budgetary flexibility and accountability for independent and/or regulatory entities. Devise and implement a strategy on the clearance of arrears, tax refunds and pension claims.Greece will modernise the tax and custom administrations benefiting from available technical assistance. To this end Greece will: Enhance the openness, transparency and international reach of the process by which the General Secretary of the General Secretariat of Public Revenues is appointed, monitored in terms of performance, and replaced. Strengthen the independence of the General Secretariat of Public Revenues (GSPR), if necessary through further legislation, from all sorts of interference (political or otherwise) while guaranteeing full accountability and transparency of its operations. To this end, the government and the GSPR will make full use of available technical assistance.The Greek authorities will: Review and control spending in every area of government spending (e.g. education, defence, transport, local government, social benefits) Work toward drastically improving the efficiency of central and local government administered departments and units by targeting budgetary processes, management restructuring, and reallocation of poorly deployed resources.Greece is committed to continue modernising the pension system. The authorities will: Continue to work on administrative measures to unify and streamline pension policies and eliminate loopholes and incentives that give rise to an excessive rate of early retirements throughout the economy and, more specifically, in the banking and public sectors. Consolidate pension funds to achieve savings.Greece commits to: Improve swiftly, in agreement with the institutions, the legislation for repayments of tax and social security arrears Calibrate instalment schemes in a manner that helps discriminate efficiently between: (a) strategic default/non-payment and (b) inability to pay; targeting case (a) individuals/firms by means of civil and criminal procedures (especially amongst high income groups) while offering case (b) individuals/firms repayment terms in a manner that enables potentially solvent enterprises to survive, averts free-riding, annuls moral hazard, and reinforces social responsibility as well as a proper re-payment culture.Greece is committed to: Banks that are run on sound commercial/banking principles Utilise fully the Hellenic Financial Stability Fund and ensure, in collaboration with the SSM, the ECB and the European Commission, that it plays well its key role of securing the banking sector’s stability and its lending on commercial basis while complying with EU competition rules. Dealing with non-performing loans in a manner that considers fully the banks’ capitalisation (taking into account the adopted Code of Conduct for Banks), the functioning of the judiciary system, the state of the real estate market, social justice issues, and any adverse impact on the government’s fiscal position.To attract investment in key sectors and utilise the state’s assets efficiently, the Greek authorities will: Commit not to roll back privatisations that have been completed. Where the tender process has been launched the government will respect the process, according to the law. Safeguard the provision of basic public goods and services by privatised firms/industries in line with national policy goals and in compliance with EU legislation.Greece commits to: Achieve EU best practice across the range of labour market legislation through a process of consultation with the social partners while benefitting from the expertise and existing input of the ILO, the OECD and the available technical assistance. Removing barriers to competition based on input from the OECD. Strengthen the Hellenic Competition Commission.Address needs arising from the recent rise in absolute poverty (inadequate access to nourishment, shelter, health services and basic energy provision) by means of highly targeted non-pecuniary measures (e.g. food stamps). Do so in a manner that is helpful to the reforming of public administration and the fight against bureaucracy/corruption (e.g. the issuance of a Citizen Smart Card that can be used as an ID card, in the Health System, as well as for gaining access to the food stamp program etc.). 10.20am GMT Over in Athens, prime minister Alexis Tsipras has just ended a meeting with one of the country’s leading anti-austerity voices, the celebrated composer Mikis Theodorakis. Our correspondent Helena Smith reports that the meeting was organized after the academy award-winning composer penned a lacerating letter in which Theodorakis called for Tsipras’ radical-left Syriza party “to find the strength, even now, to say OXI [NO] to [German finance minister Wolfgang] Schäuble’s ‘NEIN.’Tsipras, it has emerged, telephoned the composer to congratulate him on the statement shortly after its release! The meeting, which took place before a cabinet meeting at 12pm local time (10am), is aimed at nixing the mounting dissent within Syriza’s ranks over what is perceived to be the government’s climbdown in Brussels last week. 10.15am GMT Analyst Hugo Dixon of Breaking Views has given the thumbs-up to Greece’s plan (see last post)1 On first read, Greek list of reform measures looks pretty good. Lots of stuff on combatting tax evasion, corruption, special privileges2 No red rags from Greece either: eg minimum wage only raised over time in way that safeguards competitiveness, no privatisation rollback3 even Greece's humanitarian programme (eg food stamps) is supposed to have no negative fiscal effect 10.11am GMT Greece’s reforms list includes a pledge not to roll back any state asset privatisations, according to Reuters, which has seen a copy this morning.It also includes a pledge that the efforts to address Greece’s humanitarian crisis will not “hurt” its budgets (ie, push them back into deficit). The list also includes pledges to reform tax policy, review and control spending in “every area” of government spending.It also commits to consolidating pension funds to achieve savings and eliminate loopholes and incentives for early retirement - in an apparent effort to find a compromise between the government’s stated objective to avoid any further pension cuts as previously demanded by EU and IMF inspectors. 10.04am GMT My webfeed of Dijsselbloem’s appearance has now crashed. But apparently the eurogroup chief is explaining that last month’s Greek general election can’t change the way the whole eurozone operates.Syria a clear message form Greek voters but 18 other electorates, says @J_Dijsselbloem. Eurozone pits people's against each otherBasically, @J_Dijsselbloem is admitting that if a people want to decide own economic policies, social democracy, then must leave euroInteresting. @J_Dijsselbloem announces that eurozone is a political union. I wonder if voters in France, Netherlands, +16 have been told yet 9.53am GMT Dijsselbloem looks in cheery mood this morning: 9.48am GMT It’s possible that Greece could get some form of debt relief in future, once it has met all the targets in its existing programme, Dijsselbloem says.Eurogroup’s Dijsselbloem: If Greece Meets All Criteria, EZ Ministers Could Consider Further Debt Relief Measures 9.43am GMT Ouch! Jeroen Dijsselbloem tells MEPs that only one country held a meeting to discuss the dangers of Greece leaving the eurozone -- and that was Britain.That’s a reference to the emergency meeting chaired by David Cameron two weeks ago, as the Greek bailout crisis escalated.ECB, Germany, EC and Dutch government (with @J_Dijsselbloem in cabinet) discussed Greece leaving euro in 2012. His comments not credible 9.31am GMT The eurozone will stick together, Dijsselbloem insists. Grexit is not an option.#Dijsselbloem: Agreement on Greece was necessary - but was a political challenge. #Grexit simply not on the table. 9.28am GMT Disappointing! Jeroen Dijsselbloem has ducked the opportunity to to give his opinion of Greece’s list of reforms ahead of this afternoon’s conference call. 9.26am GMT Apparently the Greek proposals arrived in Jeroen Dijsselbloem’s inbox at 11.15pm last night -- or shortly after midnight in Athens.#Dijsselbloem says #Greece letter arrived in his inbox at 23:15 last night. So, no delay. But he admits trust was lost with #Tsipras gov. 9.18am GMT Ireland remains a poster boy for the eurozone. Dijsselbloem is telling MEPs that the country is making “strong progress on all fronts”, with Irish employment growing impressively. 9.14am GMT Jeroen Dijsselbleom has confirmed that the Greek reforms plan arrived “just in time”. #Dijsselbloem says #Greek reform list arrived 'just in time' 9.10am GMT Heads-up. Eurogroup chief Jeroen Dijsselbloem is testifying to the European Parliament’s Economic and Monetary affairs committee now. He’s expected to discuss the Greek bailout. 9.09am GMT Newsflash from Berlin: the German parliament will vote on Greece’s bailout extension on Friday. #Germany | CDU chief whip says German lawmakers will vote on #Greece Friday. /via @FerroTV 9.00am GMT 8.56am GMT The Greek debt crisis now has its own song.Will Butler of Canadian indie rock group Arcade Fire is penning new tunes this week, inspired by something he’s read in the Guardian each day.I was reading the Guardian’s live coverage of the forthcoming Greek proposals of how they’re going to pay off their debts, when a little blurb popped up explaining that the Greek markets were closed today because it was “Clean Monday” – the Greek Orthodox equivalent of Ash Wednesday. It was an amazing/hilarious (well, maybe mildly amusing) coincidence to me that the Greek ministers were scrambling and figuring out how to avoid strict austerity on the day that Lent starts.Heeere you goooooo: http://t.co/6rcVoj0AKk 8.39am GMT The Greek stock market is soaring, up 7.2% in early trading.The ATG index has hit its highest level since early December 2014, with bank shares surging by around 14%. 8.26am GMT Wolfgang Schäuble’s letter to the Bundestag also shows that Germany is determined that Greece sticks to the bailout agreement agreed in 2012, Ian Traynor adds.It says that “the aim of the extension is the orderly conclusion of the programme review.” 8.19am GMT Greek bonds are strengthening in value this morning, as markets welcome the news that its reform plans have been submitted, and may well be approved.This has pushed down the yield (effectively the interest rate) on Greek debts this morning, showing traders think the risk of default has fallen.#Greece's bonds rally as Greek reform measures in line w/ demands set out by #Eurozone FinMins http://t.co/K9PwJEFnpR pic.twitter.com/dtQ7sSn83Q 8.02am GMT Encouraging news for Athens. The eurozone’s chief hawk, Wolfgang Schäuble, has asked German MPs to back Greece’s bailout extension.“The Federal government advocates the proposed extension, against the background of Greece’s acknowledgment of its commitments and the agreement in the eurogroup.”The Bundestag has to support last Friday’s eurogroup pact with Greece, as do a few other eurozone parliaments... though it might be argued that some parliaments are bigger than others. If all goes well today, the Bundestag could back the package on Friday, a day before what is now called the ‘current arrangements’ expire.#grexit monday evening schaeuble sent 4-page letter to bundestag speaker supporting 4-month bailout extension http://t.co/gDqT6D0mgJ 7.51am GMT A Commission source has told Reuters that Greece’s list of reforms is “sufficiently comprehensive to be a valid starting point for a successful conclusion of the review,” adding:“We are notably encouraged by the strong commitment to combat tax evasion and corruption.” 7.44am GMT European Commission spokeswoman Mina Andreeva has confirmed that Greece got its menu of reforms in before the midnight deadline.List of reform measures of #Greek government received on time. @JunckerEU @EU_Commission 7.41am GMT Good morning, and welcome to our rolling coverage of the Greek bailout negotiations and other key events across the world economy, the financial markets and business. We start with some breaking news... Greece has taken a big step towards finalising its four-month bailout extension by submitting its list of planned economic reforms to Brussels.List of reform measures of Greek government received on time.The Holy "Troika" due to speak today - #BoE's Carney, #ECB's Draghi and #Fed Chair Yellen Continue reading...
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