10 Jul 2015
Will the creditors accept Greece’s reform proposal? – BTMU
FXStreet (Barcelona) - With Greece sending over a reform proposal largely in line with what was offered by its creditors last month, Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, notes that the key question here remains whether the Troika will accept the proposal and what kind of debt relief the Greeks will gain.
Key Quotes
“Hopes for a last minute agreement for Greece to avoid default and an exit from the euro-zone have also increased following reports that Greek Prime Minister Tsipras “bows to demands” from their creditors. The Greek government submitted fresh reform proposals yesterday which reportedly mirror those offered by their creditors at the end of last month which have since been rejected by the Greek public.”
“Greek Prime Minister Tsipras has stated that “we are ready to compromise” while some far-left members of his government have raised objections that the plan crossed “red lines”. The FT has reported that the Greek government has vowed to press ahead implementing several reforms from early next week even before a final bail-out agreement can be reached in an attempt to rebuild trust with its creditors.”
“The Greek government’s fresh proposals will now be evaluated today by the bail-out monitors before being handed over to euro-zone finance ministers on Saturday to decide whether they are sufficient to launch negotiations on a third bail-out.”
“It will still prove difficult to secure an agreement without some form of debt relief as Greek Prime Minister Tsipras will not be able to sell accepting similar bail-out terms to the Greek public to those they rejected last weekend. It was a view put forward yesterday by EU President Tusk who stated that “a realistic proposal from Greece will have to be matched by an equally realistic proposal on debt sustainability from the creditors”. It now remains to be seen whether the creditors will accept the new reforms proposal and what they are willing to offer the Greek government in exchange.”
Key Quotes
“Hopes for a last minute agreement for Greece to avoid default and an exit from the euro-zone have also increased following reports that Greek Prime Minister Tsipras “bows to demands” from their creditors. The Greek government submitted fresh reform proposals yesterday which reportedly mirror those offered by their creditors at the end of last month which have since been rejected by the Greek public.”
“Greek Prime Minister Tsipras has stated that “we are ready to compromise” while some far-left members of his government have raised objections that the plan crossed “red lines”. The FT has reported that the Greek government has vowed to press ahead implementing several reforms from early next week even before a final bail-out agreement can be reached in an attempt to rebuild trust with its creditors.”
“The Greek government’s fresh proposals will now be evaluated today by the bail-out monitors before being handed over to euro-zone finance ministers on Saturday to decide whether they are sufficient to launch negotiations on a third bail-out.”
“It will still prove difficult to secure an agreement without some form of debt relief as Greek Prime Minister Tsipras will not be able to sell accepting similar bail-out terms to the Greek public to those they rejected last weekend. It was a view put forward yesterday by EU President Tusk who stated that “a realistic proposal from Greece will have to be matched by an equally realistic proposal on debt sustainability from the creditors”. It now remains to be seen whether the creditors will accept the new reforms proposal and what they are willing to offer the Greek government in exchange.”