The government will submit two draft bills on tax and pension reform to Parliament next week even though a deal has yet to be reached between Greece and its creditors, Labor Minister Giorgos Katrougalos and Finance Minister Euclid Tsakalotos announced Tuesday in a joint statement.
Both said that even though there was still no agreement with the country’s quartet of creditors over the new tax brackets and pension reforms, they were close enough to table draft legislation.
“The legislation will be passed by the end of the month and there is time to make adjustments,” Tsakalotos said, adding that although “it’s right that we need to listen to the opinion of the institutions, as a sovereign country, we have the last word.”
The announcement follows the suspension of negotiations with creditors until next week. Both sides said that progress had been made but there were still gaps to bridge.
The move apparently took creditors by surprise as neither the two ministers nor Prime Minister Alexis Tsipras had informed them of their intentions.
The move, verging on unilateralism, is seen as a bid by the government to exert pressure on the creditors to wrap up the first review of the country’s third bailout by the end of the month so as to avoid the scenario of negotiations extending into June and to move closer to the start of debt relief discussions – a key demand of the leftist government.
Speaking on condition of anonymity, representatives of Greece’s lenders expressed concern about the government’s plans to submit the draft laws to Parliament without the lenders’ prior approval.
They noted that the normal procedure is for the content of the legislation to be agreed between the government and the institutions, for eurozone finance ministers to give their blessing and then for the bill to be debated and voted on in the Greek Parliament.
One official noted that if the legislation is tabled and then has to be altered, valuable time would be lost.
An IMF official said the Fund would only comment on the would-be legislation once it has seen its content.
Tsipras, meanwhile, has decided to try to get political support for an agreement from Greece’s European partners.
He is due to fly to Paris on Wednesday for a meeting with French President Francois Hollande, who has in the past supported softer terms for the Greek program. It is expected that Tsipras will ask the French leader to help broker a deal with the institutions.
The Greek premier is due in Strasbourg on Thursday to meet with European Parliament President Martin Schulz.