EU/IMF lenders demand asset sales, pension cuts in Greek proposal
Greece’s EU/IMF lenders have asked Athens to commit to sell off state assets, enforce pension cuts and press on with labour reforms, two sources familiar with the plan said on Thursday, demands that would cross the Greek government’s “red lines”.
If Greece were to accept the plan, lenders would aim to unlock 10.9 billion euros in unused bank bailout funds that were returned to the European Financial Stability Fund. This would enable Greece to cover its financial needs through July and August, the sources said.
Meanwhile, a debate regarding progress of ongoing negotiations with Greece’s lenders would take place in Greek Parliament on Friday at 6 p.m. following a decision by premier Alexis Tsipras, it emerged on Thursday.
In a five-page proposal presented to Tsipras in Brussels on Wednesday, EU/IMF lenders asked Athens to reduce spending on pensions by 1 percent of gross domestic product and promise not to reverse any legislated reforms, the sources said.
They also demanded Athens raise 1.8 billion euros – or 1 percent of GDP – by increasing value-added tax to 11 percent for items including drugs and 23 percent for items including electricity, the sources told Reuters.
They want Greece to scrap a benefit for low income pensioners, called EKAS, to save 800 million euros by 2016 – a move that if accepted, would force Tsipras to violate his pledge to avoid any new pension cuts.
The proposal also calls for a hike in healthcare contributions by Greeks and a cut in the fuel subsidy.
The lenders have also demanded Tsipras not make any unilateral move to restore collective bargaining rights and raise minimum wage level to pre-crisis levels – pledges he made before coming to power in January.
The proposal also asks Athens to commit to privatising Grid operator ADMIE, Greece’s major ports in Piraeus and Thessaloniki, the former airport complex of Hellenikon, Greece’s biggest oil refinery Hellenic Petroleum and Greek telecoms operator OTE.
Some of the asset sales mentioned – like ADMIE and Hellenikon – have been staunchly opposed by Tsipras’s Syriza party.
The proposal does not make any mention of offering debt relief to Athens, the sources said, which was one of the government’s major demands though the two sides have suggested it could be dealt with at a later stage.
[Reuters, Kathimerini]
