Creditors push for reform proposals as talks resume

Negotiations between Greece and its creditors resumed at the technical level via teleconference on Thursday. Meanwhile, with pressure for a deal growing as cash reserves dwindle, Finance Minister Yanis Varoufakis proposed that Greece push back the repayment of bonds held by the European Central Bank.

The so-called Brussels Group, comprising representatives of the government and the country’s creditors, spoke by teleconference on Thursday. The Greek side was based at the Maximos Mansion while Varoufakis convened a separate meeting with his general secretaries at the ministry. According to sources, the technical talks focused on lingering differences between the two sides: the size of the budget gap, which will determine the extent of the measures that Greece will be obliged to take, pension and labor sector reforms, as well as changes to value-added tax. Another teleconference is understood to be planned for Friday with the Greek team expected to travel to Brussels over the weekend ahead of a possible face-to-face meeting on Monday. According to sources, creditors want Greece to present them with a list of proposed reforms in the coming days, preferably by Sunday.

Earlier in the day government spokesman Gavriil Sakellaridis admitted that the creditors were pushing Greece on certain thorny issues including private sector wages which they continue to regard as too high.

Varoufakis did not go into detail about reforms being discussed. But he told Parliament that VAT on the Greek islands, many of which enjoy a favorable status, will not be increased before summer.

Comments made by the minister earlier at a conference sponsored by the Economist, according to which the scheduled repayment of Greek bonds held by the ECB this summer should be pushed back, caused a stir. Varoufakis noted, in comments later in Parliament, that the idea of a “swap” between the Greek government and the ECB “fills Mr Draghi’s soul with fear,” referring to the bank’s president, Mario Draghi. He added that the ECB chief “is in a big struggle against the Bundesbank.”

In a related development, Bundesbank chief Jens Weidmann criticized the ECB over its provision of emergency funding to Greece, noting that it is not the role of the ECB to finance governments.

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