Gov’t shifts focus to funding needs after list approved

The government on Tuesday shifted its focus to the pressing matter of tackling immediate funding needs after the country’s international creditors provisionally approved a list of economic reforms proposed by the Greek authorities albeit with some concerns.

In comments to reporters after the European Commission, European Central Bank and International Monetary Fund gave their approval Tuesday, a Finance Ministry official said Greece had gained “a few weeks” of breathing space and that the pressure was now on authorities to “outdo” themselves in enforcing the proposed reforms. A more pressing matter, however, is Greece’s funding needs, an estimated 7.3 billion euros for March alone. The official said talks on the funding gap would begin immediately. Officials are hoping to issue treasury bills to help raise revenue but for this they need the approval of the ECB. The government could also tap the leftover cash reserves of state bodies or stop paying its suppliers, adding to existing debts.

Meanwhile the government still has much to do to convince its creditors that it can deliver substantial economic reforms.

“We call on the Greek authorities to further develop and broaden the list of reform measures,” Eurogroup leader Jeroen Dijsselbloem said Tuesday. Dijsselbloem urged Greece to move quickly on updating and enforcing its reform proposals over the four-month extension of the country’s bailout, which was essentially rubber-stamped Tuesday.

The IMF appeared less optimistic with the Fund’s Managing Director Christine Lagarde noting in a letter to Dijsselbloem that the Greek proposal “is not conveying clear assurances that the government intends to undertake the reforms envisaged” in a number of key areas. Lagarde also remarked that the proposal lacked “clear commitments” as regards planned overhauls of pensions and value-added tax provisions.

ECB President Mario Draghi also indicated that more details were needed.

In the list of reforms, the final version of which was sent to Brussels by Greek officials late on Monday, the government affirmed its commitment to combating tax evasion and corruption, reviewing state spending and introducing measures to deal with the country’s “humanitarian crisis.” Most of the planned actions in the humanitarian program will have “no negative fiscal effect,” the Greek letter said.

Government officials stressed Tuesday that, apart from time, Greece also won the right not to impose “recessionary measures” such as further cuts to pensions and an increase in VAT on islands which the previous government had committed to.

A Finance Ministry official referred to a four-month “moratorium” during which Greece would take no unilateral action and its creditors would not insist on recessionary measures.

The government also faces pressures from within, with some ministers expressing reservations about the Greek proposal at a cabinet meeting Tuesday. Energy Minister Panayiotis Lafazanis is said to have objected to Greek pledges not to roll back privatizations. His and others’ objections are expected to be discussed when SYRIZA’s political secretariat convenes Wednesday.