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9 Jul, 2015 20:18

Greece submits debt proposals to creditors - Eurogroup

Greece has submitted proposals on potential economic reforms to its international creditors for a deal that would rescue the country from looming bankruptcy, according to Eurogroup's press office.

"New Greek proposals received by Eurogroup President Dijsselbloem," the spokesman of Jeroen Dijsselbloem, who chairs the Eurogroup of eurozone finance ministers, tweeted.

New Greek proposals received by #Eurogroup president @J_Dijsselbloem, important for institutions to consider these in their assessment

— Michel Reijns (@MichelReijns) July 9, 2015

Dijsselbloem would offer no comment on the content of the proposals until the institutions responsible for the review complete their assessment of whether there is a basis for negotiating a loan, Michel Reijns also said.

The proposals were made on the eve of the Thursday midnight deadline. After review, the EU Parliament may vote on the Athens’ offer late on Friday.

Greece is reportedly seeking €53.5 billion in a new bailout package until July 2018.

READ MORE: Greece asks for new 3yr loan, promises reform plan on July 9

While no details of the new proposals have yet been officially revealed, sources told AFP that Greece was offering to overhaul pensions and eventually ditch early retirement, as well as raise taxes, in return for a 3-year bailout plan and a “debt adjustment.”

The new proposal includes moving more items to the 23% tax rate, The Guardian reports. Greeks also agreed to eventually abolish solidarity installments for the poor pensioners by December 2019, a year earlier than planned.

The proposal also includes concessions to raising the retirement age to 67 by 2022, as well as cut military spending by €100m in 2015 and by €200m in 2016.

Athens has also agreed to raise raising corporation tax to 28% and implement more measures to fight tax evasion. The agreement also includes privatization of regional airports and seaports.

Meanwhile, a Reuters source specified that Greece has offered to save 1 percent of GDP “worth of pensions” in 2016.

On Wednesday Greece already asked its creditors for a three-year loan facility from the European Stability Mechanism (ESM), promising to present a detailed plan on quick economic reforms no later than on Thursday. Among the prompt reforms Athens named a set of measures including a tax reform and pension cuts which it is ready to implement starting from next week.

Realistic proposal from Athens needs to be matched by realistic proposal from creditors on debt sustainability to create win-win situation

— Donald Tusk (@eucopresident) July 9, 2015

We will also include additional actions that the Republic will undertake to further strengthen and modernize its economy,” the finance minister said in a statement.

Locked in talks with Athens, EU officials have urged PM Alexis Tsipras and his cabinet to find a solution which would prevent Greece’s exit from the eurozone.

Inability to find agreement may lead to bankruptcy of Greece and insolvency of the banking system. Everyone will lose,” European Council President Donald Tusk said on Wednesday.

After failing to repay €1.6 billion ($1.76 billion) to the IMF by the July 1 deadline, Greece became the first developed country to default on its international obligations.