The Greek government is on a race with time to legislate measures in order to reach a deal with creditors within May as it is running out of liquidity. After the latest statement by German Finance Minister Wolfgang Schaeuble that there will not be partial disbursement of funds for partial implementation of measures, Greek Prime Minister Alexis Tsipras has decided to rush procedures for completion of negotiations and agreement by the end of May. Athens is rushing to legislate measures that creditors have already agreed on, in order for creditors to open liquidity taps. The measures, according to government officials, will not be recessionary. The governing council had a five-hour meeting yesterday and decided to back down on the referendum issue. There will be another meeting today at 6:00 pm in order to review the new tax legislation drafts. Interior Minister Nikos Voutsis told Greek television on Wednesday that, “An immediate recourse to a referendum or elections is not in our plans right now.” According to sources close to the negotiation team in Brussels, there is convergence on the proposals for extra taxation on Greece’s 500 richest families, increase in luxury taxes, and extra solidarity contributions for incomes over 50,000 euros a year. Regarding negotiations on value added tax, there are strong disagreements on the rate. There is also disagreement on the 2015 fiscal gap and the percentage of primary surplus. Also, creditors insist on cuts on supplementary pensions and an increase of retirement age, and on collective bargaining in the labor market. Tsipras, however, insists that an agreement with creditors is a political will issue and not a technical issue. On the other side, creditors say that in order for any deal to be made, there must be staff level agreement first.
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