Issue link: https://maltatoday.uberflip.com/i/540322
maltatoday, SUNDAY, 12 JULY 2015 News 3 CONTINUED FROM PAGE 1 But the decision as to what will happen to Greece will have to be taken at a political level by heads of gov- ernment. Italy and France are said to be getting ready to tell Germany that Greece can no longer be humiliated. But Germany has the backing of Finland, whose coalition partners the True Finns, are threatening to leave the government if more finance is ex- tended to Greece. Tsakalotos pleaded with ministers yester- day to have Greece given another chance. Sources told MaltaToday his speech was "impassioned and emotional... evidently feeling cornered and in a hopeless situa- tion." He was said to have told finance ministers that Greece was accepting a bigger pro- gramme that had to be discussed over the next four weeks. "What else do we need to do? What else do I need to commit myself to?... if you refuse us, it would be tragic for Greece." German proposals But the Germans' initial treatment of Greece's proposals was that they lacked "a number of paramount important reform ar- eas to modernise the country", adding that the labour market reform, public sector re- form, and privatisations were insufficient. The two avenues it proposed was the transfer of €50 billion of Greek assets to an external fund like the Institution of Growth in Luxembourg, to be privatised over time and decrease debt; and automatic spending cuts in case of missed deficit targets. But it also proposed an audacious Plan B. In case debt sustainability and credible implementation of reforms could not en- sured up-front, Greece "should be offered swift negotiations on a time-out from the Eurozone, with posible debt restructuring, if necessary, in a Paris Club... over at least the next five years. Only this way forward, the Germans said, could allow for sufficient debt restructur- ing, which was now not in line with the EU Treaty's rules for membership in the mon- etary union. "The time-out solution should be ac- companied by supporting Greece as an EU member state and the Greek people with growth-enhancing, humanitarian and tech- nical assistance over the next years. The time-out solution should also be accompa- nied by streamlining all pillars of the Eco- nomic and Monetary Union and concrete measures to strengthen the Eurozone's governance." Inside the Eurogoup The finance ministers' technical teams started work on the Greek proposals at 3pm, but it was clear from the very start that eurozone ministers would not concede much ground. Although Greece was turn- ing its back on its red lines, finance minister Edward Scicluna said the proposals showed an "incongruence" with what Syriza prom- ised its electorate, and that creditors now had a problem in trusting the Greek gov- ernment. The eurozone's sire, German finance min- ister Wolfgang Schäuble, had the same line ahead of the meeting. Greece's proposals could not be trusted to be implemented af- ter their radical volte-face. His officials said Greece did not have the capacity to implement a three-year financ- ing programme, and suggested that it pri- vatises its assets into an external fund that would provide it with solvency. Germany, mindful of its electorate's oppo- sition to any relief, ruled out a debt haircut, saying this was not allowed by the Trea- ties, and said that it would be difficult to re-profile the debt "without making us look ridiculous". "We need to be serious and face reality and not keep kicking the can down the road," German officials said. Malta echoed the sense of skepticism in- side the room. "There are contradictions which we have not solved yet," Scicluna told the ministers. "We are seeking reassur- ances which in this case can no longer be given by word of mouth or even by written text, unfortunately. We've been here before." He also accused the Greeks of al- lowing debt to climb up from 124% to 200% over four months simply with their reluctance to meet the institutions. Likewise, Austria said it could not sell a new programme to its elec- torate with Greece's track-record in implementation. Finland, whose national TV sta- tions yesterday reported that it wanted Greece out of the euro- zone, said the reforms did not even go far enough. "You are asking for €74 billion after a referendum," minister Alexander Stubb said, whose government is in coalition with right-wingers True Finns Party, which staunchly oppose more finance to Greece. "How do I sell this at home? Can Greece be trusted to stick to the rules?" Slovenia vociferously said it could not concede yet another finance package with a haircut, when Greece had never honoured its commitments. "The IMF has already said it is unlikely to meet its new commitments. Why are ridiculing ourselves. We do not have a mandate for this. I want to know the cost of plan B," its minister said. Portugal echoed the Finns' mistrust of such an "astonishing" programme, with such a thin basis for negotiations, while the Dutch said there were serious concerns with the commitment of the Greeks. The Slovaks refused to start negotiations. Spain, whose prime minister Mariano Ra- joy faces an electoral battle to fend off the left-wing Podemos, also disputed the ability of Greece to commit to a reform package it had just refused a week ago in a referen- dum. The Italians and French were less hawk- ish, and suggested that negotiations should proceed if the Greeks can implement re- forms within the next days to reinstate trust in their pledges. Cyprus said a positive con- clusion would require more from Greece. "Trust must be earned. We should give Greece a last chance. Negotiations should be taken further." Greece's new finance minister, Euclid Tsakalotos, however turned down Germa- ny's proposal to take national assets into an overseas fund. Sources told MaltaToday that Eurogroup president Jeroen Dijsselbloem had to in- terrupt Tsakalotos's "long, rambling and theoretical speech" which appeared to skirt around the questions he was being asked. Tsakalotos agreed to have external audi- tors on any new programme, while the In- ternational Monetary Fund said they would add 20 years to debt maturities and another 10 to the grace period: 30 years to the 60 years for the debt repayment, a re-profiling that should leave Greece in a position to return to the market before the end of the programme. Greeks get hostile reaction say goodbye to hefty electricity bills install photovoltaic solar panels today for a greener lifestyle and brighter future t: 00356 2156 9006 m: 00356 7959 2767 w: www.econetique.com e: info@econetique.com mompalao buildings, tower road, msida xewkija Industrial estate, gozo fxb, 346, mdina road, qormi The thin red lines? Greece's pledges for €12 billion savings Budget surplus of 1% GDP this year, 2% in • 2016, and 3% and 3.5% in 2017 and 2018 respectively Raise VAT on restaurants and catering to • 23% Scrap discounted VAT for Greek islands • Increase income tax from 11% to 15% • Raise retirement age to 67 • Remove solidarity fund for poorest • pensioners by 2017 Increase corporation tax to 28% • Slash military spending by €100 million this • year and double that in 2016 Phase out preferential tax for shipping • Discourage early retirement • Reduce public sector wages by 2019 • Sell off state assets, privatise electricity • grid company, regional airports and ports including Pireaus and Thessaloniki Anti-corruption drive and party nancing • laws Set up autonomous tax revenue agency and • streamline tax collection