Top Stories


    Feb 25, 2015

    Compromise is key in Greek reforms


    GREECE has promised not to roll back any ongoing or completed privatisation, and will ensure that any state spending to address a "humanitarian crisis" does not hurt its budget, according to a document yesterday containing its reform plans.

    The list of reforms aims to offer compromises on major issues such as labour reforms and social spending, to satisfy both European partners funding the country and Greek voters who voted in a left-wing government to end years of rigid austerity.

    Greece needed to present its plans as a condition for extending its bailout programme by four months, in a deal struck with euro-zone partners on Friday.

    On the issue of minimum wages, for example, Prime Minister Alexis Tsipras' government climbed down from election pledges to raise them immediately. Instead, it said it would phase in collective bargaining with a view to raising minimum wages over time and that any changes would be agreed on with partners.

    Greece also said it would reform the public sector wage system in a way that would not reduce pay further, but would ensure that the overall public wage bill does not rise.

    Athens also committed to consolidating pension funds to achieve savings, and eliminate loopholes and incentives for early retirement - in an apparent effort to find a compromise between the government's objective of avoiding any further pension cuts, as previously demanded by European Union and International Monetary Fund (IMF).

    Athens sent the six-page document to its EU and IMF creditors late on Monday. They must approve the plans to pave the way for the four-month extension.

    Euro-zone finance ministers discussed the reform plan during a conference call yesterday, and the initial reaction to the plan has been positive.

    A source close to the European Commission said that it was a "valid starting point" for talks over the bailout.

    The list also includes pledges to reform tax policy, and review and control spending in "every area" of spending.

    Athens also promised to ensure its banks are run on sound commercial and banking principles, in an apparent effort to show that the government will not interfere in banking operations.

    The head of the Eurogroup also said yesterday that euro-zone countries were not discussing a hypothetical Greek exit from the euro zone, and only non-euro member Britain discussed it.

    "You've said a number of member states did prepare (for a Greek exit)," Jeroen Dijsselbloem told a European Parliament member during a debate. "I only heard about one country where the Cabinet had a meeting to talk about the exit and that was the British government."

    "The Brits are as yet not a member of the Eurogroup. So no, it's not discussed, and it shows we have a very strong political commitment to keep the euro zone intact," he said.