Greece Has Less Than One Week Of Cash; Another DOA Proposal Discussed Thursday; Exceptional Game Playing

Another DOA Greek Proposal Discussed Thursday

It’s likely make-or-break for Greece in the next two days.

Tomorrow the Eurozone to Weigh Greek Bailout Proposal, but it already that appears it’s no different from previous proposals.

There will be no meeting on Friday if Germany rejects this one up front.

Officials from 19 eurozone governments will meet in Brussels on Thursday to examine a request from Greece to extend its €172bn rescue programme but there were already signs the proposal would be rejected.

If Athens’ eleventh-hour request is rejected, officials said it was hard to see how Greece could be kept in an EU bailout programme after it expires at the end of next week. That would leave the country without emergency EU funding for the first time since the start of the eurozone crisis in May 2010 and raise the possibility the Greek government could run out of cash as soon as next month.

Several officials said they still had to see the request before passing judgment; if Thursday’s meeting of the so-called euro working group concludes the proposal is a step forward, a meeting of finance ministers would probably be held on Friday.

In Berlin, Martin Jäger, the finance ministry spokesman, said any request that did not include a commitment to complete the terms of the current bailout would likely be unacceptable, and other German officials said a proposal based on EU Economic Affairs Commissioner Pierre Moscovici’s plan — which Greek ministers have indicated would be the framework for their request — would also fail to pass muster.

“We’re prepared to discuss an extension, but only if the Greek side has the clear intention to complete the programme,” said Mr Jäger.

Major Points of Disagreement

Greece accepted Moscovici’s plan, but Germany rejected it. In fact, Germany has pretty much rejected every compromise to date.

Instead of running a primary surplus — a budget surplus before interest payments — of 3 per cent of economic output this year and 4.5 per cent in 2016 and 2017, the Athens proposals say it is committed to a surplus of 1.5 per cent. Germany will bend no further 3 percent.

Instead of counting on the €2.2bn in privatisation receipts in 2015, Athens suggests using €1.9bn in Greek bond profits held by the European Central Bank to pay down debt instead. This is a no-go for Germany and the ECB.

Greece estimates a windfall of €5.5bn from tax reforms, including cracking down on evasion and raising taxes on the wealthy. However, a separate submission also suggests writing off about €70bn in unpaid penalties against taxpayers who have been late meeting their bills.