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Eurozone approves Greek deal, but creditors voice doubts - as it happened
Eurozone approves Greek deal, but creditors voice doubts - as it happened
(about 21 hours later)
7.55pm GMT
7.55pm GMT
19:55
19:55
And finally finally, here’s Europe editor Ian Traynor’s news story on today’s developments, confirming that the coming weeks will be difficult:
And finally finally, here’s Europe editor Ian Traynor’s news story on today’s developments, confirming that the coming weeks will be difficult:
Greece secures eurozone bailout extension for four months
Greece secures eurozone bailout extension for four months
Greece’s new leftwing government faces months of fraught negotiations with its creditors over how to ease its unsustainable debt levels and austerity programmes after securing - but only conditionally - a eurozone lifeline on Tuesday that wins it time until the end of June.
Greece’s new leftwing government faces months of fraught negotiations with its creditors over how to ease its unsustainable debt levels and austerity programmes after securing - but only conditionally - a eurozone lifeline on Tuesday that wins it time until the end of June.
Alexis Tsipras, the Greek prime minister and leader of the Syriza movement, had to bow to German-led pressure to stick to the broad terms of its €240bn (£176bn) bailout in order to obtain a four-month extension to the rescue he repeatedly pledged to scrap.
Alexis Tsipras, the Greek prime minister and leader of the Syriza movement, had to bow to German-led pressure to stick to the broad terms of its €240bn (£176bn) bailout in order to obtain a four-month extension to the rescue he repeatedly pledged to scrap.
Late on Monday the new finance minister, Yanis Varoufakis, sent a six-page list of proposed economic reforms to Brussels which held to some of Tsipras’s election campaign pledges, but largely diluted or abandoned them to win the support of the other 18 governments in the eurozone, and of the troika of bailout overseers from the European commission, the European Central Bank (ECB) and the International Monetary Fund (IMF).
Late on Monday the new finance minister, Yanis Varoufakis, sent a six-page list of proposed economic reforms to Brussels which held to some of Tsipras’s election campaign pledges, but largely diluted or abandoned them to win the support of the other 18 governments in the eurozone, and of the troika of bailout overseers from the European commission, the European Central Bank (ECB) and the International Monetary Fund (IMF).
Despite Tsipras’s assertions, for domestic consumption, that the hated troika is dead and that the bailout programme has been ditched, both remain very much in play, with the troika grudgingly blessing Tuesday’s proposals from Athens and mandated to deliver a more detailed verdict by the end of April.......(for more click here)
Despite Tsipras’s assertions, for domestic consumption, that the hated troika is dead and that the bailout programme has been ditched, both remain very much in play, with the troika grudgingly blessing Tuesday’s proposals from Athens and mandated to deliver a more detailed verdict by the end of April.......(for more click here)
A quick PS. Over in Greece tonight, the flagship evening news programme on Skai TV is saying that the government will face a three-pronged opposition: from
A quick PS. Over in Greece tonight, the flagship evening news programme on Skai TV is saying that the government will face a three-pronged opposition: from
From Athens, Helena Smith adds:
From Athens, Helena Smith adds:
Tonight both the former prime minister Antonis Samaras and his deputy, socialist Pasok leader Evangelos Venizelos, accused the Tsipras government of taking Greece back into a “third memorandum” with the country’s creditors.
Tonight both the former prime minister Antonis Samaras and his deputy, socialist Pasok leader Evangelos Venizelos, accused the Tsipras government of taking Greece back into a “third memorandum” with the country’s creditors.
Venizelos said:
Venizelos said:
“I am truly very sorry. We have lost a lot of time and instead of exiting the memorandum and moving onto a preliminary credit line with more relaxed conditions we will, come July, be moving into a third memorandum.”
“I am truly very sorry. We have lost a lot of time and instead of exiting the memorandum and moving onto a preliminary credit line with more relaxed conditions we will, come July, be moving into a third memorandum.”
There’s also talk that Greece’s pledge not to unravel privatisations is the major bone of contention among Syriza MPs. We sense trouble ahead.....
There’s also talk that Greece’s pledge not to unravel privatisations is the major bone of contention among Syriza MPs. We sense trouble ahead.....
7.45pm GMT
7.45pm GMT
19:45
19:45
Closing summary
Closing summary
Enrique Diaz, Chief Risk Officer at financial services provider Ebury, sums up the situation tonight:
Enrique Diaz, Chief Risk Officer at financial services provider Ebury, sums up the situation tonight:
“Today’s green light to Greece was undoubtedly good news. The deal is a reasonable one for both sides. Although the Greeks have had to abandon many of their unrealistic initial requests, the Greek Government is now once again in control of the reform process.
“Today’s green light to Greece was undoubtedly good news. The deal is a reasonable one for both sides. Although the Greeks have had to abandon many of their unrealistic initial requests, the Greek Government is now once again in control of the reform process.
“That said, the outlook for the Euro remains bearish. The single currency only responded moderately to the news, rising by 0.4% against the Dollar.
“That said, the outlook for the Euro remains bearish. The single currency only responded moderately to the news, rising by 0.4% against the Dollar.
Given the ECB’s recent injection of around €1.2 trillion into the economy, we should see continued downward pressure on the Euro against the Dollar over the next eighteen months.”
Given the ECB’s recent injection of around €1.2 trillion into the economy, we should see continued downward pressure on the Euro against the Dollar over the next eighteen months.”
So, let’s wrap up with a very quick summary after a long day....
So, let’s wrap up with a very quick summary after a long day....
Eurozone finance ministers have given their approval to Greece’s economic reform plans, but the longer battle over the Greek bailout has just begun.
Eurozone finance ministers have given their approval to Greece’s economic reform plans, but the longer battle over the Greek bailout has just begun.
The decision clears the way to a four-month bailout extension that will avoid the danger of Athens running out of funds, once national parliaments have also given the green light.
The decision clears the way to a four-month bailout extension that will avoid the danger of Athens running out of funds, once national parliaments have also given the green light.
The decision was taken on a conference call this afternoon, after the eurogroup had assessed a series of economic reforms sent by Greece late last night. [click here to read the proposals in full].
The decision was taken on a conference call this afternoon, after the eurogroup had assessed a series of economic reforms sent by Greece late last night. [click here to read the proposals in full].
Those proposals strike a middle-ground between the demands of Greece’s creditors, and the expectations of MPs in the Syriza party, and the Greek electorate. And all sides remain somewhat unsatisfied tonight.
Those proposals strike a middle-ground between the demands of Greece’s creditors, and the expectations of MPs in the Syriza party, and the Greek electorate. And all sides remain somewhat unsatisfied tonight.
The International Monetary Fund has already warned that Greece’s proposals don’t meet its own expectations.
The International Monetary Fund has already warned that Greece’s proposals don’t meet its own expectations.
While the European Central Bank warned that Greece can only replace existing austerity measures with new plans that are “at least as effective”.
While the European Central Bank warned that Greece can only replace existing austerity measures with new plans that are “at least as effective”.
And PM Tsipras apparently faced some dissent at a cabinet meeting today.
And PM Tsipras apparently faced some dissent at a cabinet meeting today.
The financial markets, though, are pleased that the Greek crisis has eased (although national parliaments still need to give their approval).
The financial markets, though, are pleased that the Greek crisis has eased (although national parliaments still need to give their approval).
Athens stock market surged by 10%, while Greek borrowing costs fell sharply as investors treated its debt as less risky
Athens stock market surged by 10%, while Greek borrowing costs fell sharply as investors treated its debt as less risky
And in London, the FTSE 100 hit a new record high -- smashing through its dot-com peak.
And in London, the FTSE 100 hit a new record high -- smashing through its dot-com peak.
And analysts argue that the Footsie isn’t overvalued, and could climb further....
And analysts argue that the Footsie isn’t overvalued, and could climb further....
I’ll be back tomorrow to do it all again. Thanks, as ever, for reading and commenting. GW
I’ll be back tomorrow to do it all again. Thanks, as ever, for reading and commenting. GW
Updated
Updated
at 7.47pm GMT
at 7.47pm GMT
7.26pm GMT
7.26pm GMT
19:26
19:26
Valdis Dombrovskis, the European Commission vice-president for the Euro, tweets tonight that Greece’s reform plan is a good “first step”:
Valdis Dombrovskis, the European Commission vice-president for the Euro, tweets tonight that Greece’s reform plan is a good “first step”:
Speaking to reporters earlier today on #Greece pic.twitter.com/4fpff85THx
Speaking to reporters earlier today on #Greece pic.twitter.com/4fpff85THx
#Eurogroup confirmed reform list is comprehensive enough as valid first step. Must move forward with practical&swift implementation #Greece
#Eurogroup confirmed reform list is comprehensive enough as valid first step. Must move forward with practical&swift implementation #Greece
He also echoes Mario Draghi’s point earlier - that any new measures introduced by Greece must be ‘as good’ as existing
He also echoes Mario Draghi’s point earlier - that any new measures introduced by Greece must be ‘as good’ as existing
Possible to negotiate replacing some measures with others with same fiscal value – if not done unilaterally #Greece
Possible to negotiate replacing some measures with others with same fiscal value – if not done unilaterally #Greece
Updated
Updated
at 7.29pm GMT
at 7.29pm GMT
7.07pm GMT
7.07pm GMT
19:07
19:07
The Greek government is briefing tonight that it has achieved some success with the eurogroup, but warned that key issues need to be clarified.
The Greek government is briefing tonight that it has achieved some success with the eurogroup, but warned that key issues need to be clarified.
Efi Efthimiou of Capital.GR has the details:
Efi Efthimiou of Capital.GR has the details:
#Greece FinMin sources:We r in uncharted water+this is coz there’s no clarification yet on issues like funding +the primar surpl @capitalgr
#Greece FinMin sources:We r in uncharted water+this is coz there’s no clarification yet on issues like funding +the primar surpl @capitalgr
#Greece FinMIn sources: Biggest gain from agreement reached is that there is a 4month moratorium without recessionary measures @capitalgr
#Greece FinMIn sources: Biggest gain from agreement reached is that there is a 4month moratorium without recessionary measures @capitalgr
#Greece FinMin sources: Today’s Eurogroup was successfully completed. We have passed the obstacle (via @capitalgr )
#Greece FinMin sources: Today’s Eurogroup was successfully completed. We have passed the obstacle (via @capitalgr )
#Greece FinMins sources: We also managed to separate loan agreement from MoU, which initially considered “unacceptable” by some partners
#Greece FinMins sources: We also managed to separate loan agreement from MoU, which initially considered “unacceptable” by some partners
6.57pm GMT
6.57pm GMT
18:57
18:57
Here’s a photo of that CDU party meeting, where MPs apparently raised concerns over the Greek deal:
Here’s a photo of that CDU party meeting, where MPs apparently raised concerns over the Greek deal:
Updated
Updated
at 6.58pm GMT
at 6.58pm GMT
6.51pm GMT
6.51pm GMT
18:51
18:51
I missed this earlier. Greece’s economic reforms include an intriguing hint that they could introduce a basic income for citizens aged tween 50 and 65.
I missed this earlier. Greece’s economic reforms include an intriguing hint that they could introduce a basic income for citizens aged tween 50 and 65.
That’s an important issue in economics today; with many experts arguing that in a world with less growth and major technological change, governments may have to guarantee BI for all citizens.
That’s an important issue in economics today; with many experts arguing that in a world with less growth and major technological change, governments may have to guarantee BI for all citizens.
Tomas Hirst has a good take on Business Insider:
Tomas Hirst has a good take on Business Insider:
BI is, at its core, about a redefinition of the conception that was prevalent at the inception of the modern welfare state that the point of welfare payments were to keep people “fit for work”. That may have been an appropriate moniker for its time, but modern societies have developed different expectations for the quality of life that its citizens should enjoy.
BI is, at its core, about a redefinition of the conception that was prevalent at the inception of the modern welfare state that the point of welfare payments were to keep people “fit for work”. That may have been an appropriate moniker for its time, but modern societies have developed different expectations for the quality of life that its citizens should enjoy.
Just being fit enough to get into work doesn’t cut it anymore.
Just being fit enough to get into work doesn’t cut it anymore.
In the case of Greece it looks like such a scheme would initially be targeted at those nearing pension age in order to prevent them from taking early retirement — providing them with an income that they would otherwise draw from the state pension fund.
In the case of Greece it looks like such a scheme would initially be targeted at those nearing pension age in order to prevent them from taking early retirement — providing them with an income that they would otherwise draw from the state pension fund.
The Greek government is calling for a radical new welfare policy http://t.co/L4dFU5b8fR
The Greek government is calling for a radical new welfare policy http://t.co/L4dFU5b8fR
6.47pm GMT
6.47pm GMT
18:47
18:47
Had Syriza failed? Sony Kapoor of the Re-Define thinktank argues that it has not, even though the bailout deal fails to meet all the government’s pre-election promises.
Had Syriza failed? Sony Kapoor of the Re-Define thinktank argues that it has not, even though the bailout deal fails to meet all the government’s pre-election promises.
He points to three victories.
He points to three victories.
1) On process:
1) On process:
The Eurozone has accepted that it is legitimate for the Greek government to put forward its own proposals as an alternative to reforms prescribed by the creditors. This is more than it appears on the surface, given the very top-down regimented and legalistic approach followed by the Troika so far....
The Eurozone has accepted that it is legitimate for the Greek government to put forward its own proposals as an alternative to reforms prescribed by the creditors. This is more than it appears on the surface, given the very top-down regimented and legalistic approach followed by the Troika so far....
2) Getting time to develop its own policies....
2) Getting time to develop its own policies....
Being a party that has thus far not been part of the clientelist state, Syriza is more likely to actually deliver on these. It will also focus more on creating an e-government, transparency and on investments essential to help build up productive sectors. Many of the reforms in the programme that has been put forward are sensible and reasonable. It has a few more weeks to put more flesh on the bone and put forward an alternative program to negotiate with the creditors when the “bridge” runs out.
Being a party that has thus far not been part of the clientelist state, Syriza is more likely to actually deliver on these. It will also focus more on creating an e-government, transparency and on investments essential to help build up productive sectors. Many of the reforms in the programme that has been put forward are sensible and reasonable. It has a few more weeks to put more flesh on the bone and put forward an alternative program to negotiate with the creditors when the “bridge” runs out.
3) ...and time to show Syriza can actually govern:
3) ...and time to show Syriza can actually govern:
It has won a precious few weeks to demonstrate to its creditors and Eurozone partners that it is a serious government and that Syriza has actually moved beyond the rhetoric of the election into the slow business of taking Greece out of its great depression. What Syriza does in the next few months will be closely watched and scrutinised for intent, as well as competence.
It has won a precious few weeks to demonstrate to its creditors and Eurozone partners that it is a serious government and that Syriza has actually moved beyond the rhetoric of the election into the slow business of taking Greece out of its great depression. What Syriza does in the next few months will be closely watched and scrutinised for intent, as well as competence.
In a situation when minister Schäuble was once again, as in 2012, ready to push Greece out of the Eurozone and many Greece’s partners had lost trust in the country, this is perhaps the most important victory.
In a situation when minister Schäuble was once again, as in 2012, ready to push Greece out of the Eurozone and many Greece’s partners had lost trust in the country, this is perhaps the most important victory.
Here’s the full piece: The Greek Deal – A game changer or a mere name changer?
Here’s the full piece: The Greek Deal – A game changer or a mere name changer?
Updated
Updated
at 6.47pm GMT
at 6.47pm GMT
6.29pm GMT
6.29pm GMT
18:29
18:29
The German ruling CDU party have some concerns about the Greek deal, tweets the FT’s Peter Spiegel.
The German ruling CDU party have some concerns about the Greek deal, tweets the FT’s Peter Spiegel.
They’ll decide on Thursday whether to back it in Friday’s vote in the Bundestag.
They’ll decide on Thursday whether to back it in Friday’s vote in the Bundestag.
Sounds like there was a decent amt of septicism in #Schauble meeting today with @CDU's Bundestag group on #Greece http://t.co/EyMeQndQLm
Sounds like there was a decent amt of septicism in #Schauble meeting today with @CDU's Bundestag group on #Greece http://t.co/EyMeQndQLm
The @CDU Bundestag group agreed to meet Thurs morning to take view on #Greece extension at meeting w/Schauble this pm http://t.co/EyMeQndQLm
The @CDU Bundestag group agreed to meet Thurs morning to take view on #Greece extension at meeting w/Schauble this pm http://t.co/EyMeQndQLm
It would be a major shock if the Bundestag rebelled against Angela Merkel and Wolfgang Schauble on Friday. But by playing hardball now, CDU can help set the tone for the upcoming negotiations with Greece.
It would be a major shock if the Bundestag rebelled against Angela Merkel and Wolfgang Schauble on Friday. But by playing hardball now, CDU can help set the tone for the upcoming negotiations with Greece.
6.16pm GMT
6.16pm GMT
18:16
18:16
Greece’s mountain of borrowing will eventually need to be restructured, argues debt campaigners tonight.
Greece’s mountain of borrowing will eventually need to be restructured, argues debt campaigners tonight.
Sarah-Jayne Clifton, Director of the Jubilee Debt Campaign, says:
Sarah-Jayne Clifton, Director of the Jubilee Debt Campaign, says:
“The agreement affords a small but vital pocket of breathing space for Greece to begin to tackle its humanitarian crisis. But the fundamental injustice of the Greek debt situation remains unaddressed.
“The agreement affords a small but vital pocket of breathing space for Greece to begin to tackle its humanitarian crisis. But the fundamental injustice of the Greek debt situation remains unaddressed.
The people of Greece continue to carry the burden of debts caused by reckless, unaccountable banks. Debt crises across the world show that constant debt rescheduling does not work. Greece’s debt is unjust and unsustainable, and debt cancellation is the only fair response. Syriza’s original proposal for a European debt conference needs to be revived.”
The people of Greece continue to carry the burden of debts caused by reckless, unaccountable banks. Debt crises across the world show that constant debt rescheduling does not work. Greece’s debt is unjust and unsustainable, and debt cancellation is the only fair response. Syriza’s original proposal for a European debt conference needs to be revived.”
6.01pm GMT
6.01pm GMT
18:01
18:01
Back to the Greece bailout deal, and Open Europe’s Pieter Cleppe reckons the Dutch parliament will approve the four-month bailout extension on Thursday.
Back to the Greece bailout deal, and Open Europe’s Pieter Cleppe reckons the Dutch parliament will approve the four-month bailout extension on Thursday.
Majority in Dutch Lower House supports Greek deal, voting on motions related to it on Thursday http://t.co/79O1QCdtmK #greece #kolotoumba
Majority in Dutch Lower House supports Greek deal, voting on motions related to it on Thursday http://t.co/79O1QCdtmK #greece #kolotoumba
5.59pm GMT
5.59pm GMT
17:59
17:59
Read the full story of the FTSE 100’s watershed day here:
Read the full story of the FTSE 100’s watershed day here:
FTSE 100 hits record high of 6959 after Greece’s reform plan is approved
FTSE 100 hits record high of 6959 after Greece’s reform plan is approved
FTSE 100 hits record high of 6959 after Greece's reform plan is approved http://t.co/mZgTBWFxYy
FTSE 100 hits record high of 6959 after Greece's reform plan is approved http://t.co/mZgTBWFxYy
5.48pm GMT
5.48pm GMT
17:48
17:48
Bookmaker Paddy Power is taking bets on when the FTSE 100 will hit 7,500 points.
Bookmaker Paddy Power is taking bets on when the FTSE 100 will hit 7,500 points.
5.42pm GMT
5.42pm GMT
17:42
17:42
That record high looks a bit less impressive once you adjust for inflation (although don’t forget those dividend payments)
That record high looks a bit less impressive once you adjust for inflation (although don’t forget those dividend payments)
FTSE 100 at an "all time high". But adjust for consumer price inflation. Shows index still 27% lower than peak: pic.twitter.com/nMpXHEg1MR
FTSE 100 at an "all time high". But adjust for consumer price inflation. Shows index still 27% lower than peak: pic.twitter.com/nMpXHEg1MR
Updated
Updated
at 6.01pm GMT
at 6.01pm GMT
5.35pm GMT
5.35pm GMT
17:35
17:35
Today is a “watershed moment” for City investors, says Tom Stevenson, investment director at Fidelity Worldwide Investment.
Today is a “watershed moment” for City investors, says Tom Stevenson, investment director at Fidelity Worldwide Investment.
Investors have finally exorcised the ghost of the dot.com bubble which has haunted the market for a decade and a half. Of course, what matters is not the actual level of the market but the value it represents. In 1999 shares were grossly overvalued.
Investors have finally exorcised the ghost of the dot.com bubble which has haunted the market for a decade and a half. Of course, what matters is not the actual level of the market but the value it represents. In 1999 shares were grossly overvalued.
Today, thanks to rising profits over the years, UK shares are reasonably priced – not cheap but by no means expensive.”
Today, thanks to rising profits over the years, UK shares are reasonably priced – not cheap but by no means expensive.”
5.26pm GMT
5.26pm GMT
17:26
17:26
Although the FTSE 100 is flat over the last 15 years, the value of London’s blue-chip index is actually up by 67% once you include dividends:
Although the FTSE 100 is flat over the last 15 years, the value of London’s blue-chip index is actually up by 67% once you include dividends:
Updated
Updated
at 5.33pm GMT
at 5.33pm GMT
5.19pm GMT
5.19pm GMT
17:19
17:19
So is the London stock market overvalued again, as in 1999?
So is the London stock market overvalued again, as in 1999?
Laith Khalaf, senior analyst at Hargreaves Lansdown, argues that it’s not.
Laith Khalaf, senior analyst at Hargreaves Lansdown, argues that it’s not.
On a Price-per-earnings basis (the classic ratio of how much shares cost, versus the dividends they pay), the FTSE 100 is actually 50% cheaper now than it was in December 1999.
On a Price-per-earnings basis (the classic ratio of how much shares cost, versus the dividends they pay), the FTSE 100 is actually 50% cheaper now than it was in December 1999.
Khalaf explains:
Khalaf explains:
The current P/E of the UK’s largest companies currently sits at 16 times earnings.
The current P/E of the UK’s largest companies currently sits at 16 times earnings.
This compares with the dizzy heights of almost 30 times earnings reached in December 1999. The long term average is 15 times earnings.It is tempting to think a new peak in the market is a good time to sell, but investors shouldn’t get spooked by the FTSE 100 reaching new highs.
This compares with the dizzy heights of almost 30 times earnings reached in December 1999. The long term average is 15 times earnings.It is tempting to think a new peak in the market is a good time to sell, but investors shouldn’t get spooked by the FTSE 100 reaching new highs.
The headline index doesn’t tell us anything about how stock prices relate to company earnings, it is therefore a bit like a clock face without any hands.When you factor in company earnings, the UK stock market looks close to its long term average. In other words the glass is either half empty, or half full, depending on your point of view
The headline index doesn’t tell us anything about how stock prices relate to company earnings, it is therefore a bit like a clock face without any hands.When you factor in company earnings, the UK stock market looks close to its long term average. In other words the glass is either half empty, or half full, depending on your point of view
Updated
Updated
at 5.20pm GMT
at 5.20pm GMT
5.17pm GMT
5.17pm GMT
17:17
17:17
5.03pm GMT
5.03pm GMT
17:03
17:03
The highs of December 1999 were followed by the dot-com crash, which saw the FTSE 100 slide for two years.
The highs of December 1999 were followed by the dot-com crash, which saw the FTSE 100 slide for two years.
It then recovered, before the credit crunch struck, followed by the collapse of Lehman Brothers and a global downturn.
It then recovered, before the credit crunch struck, followed by the collapse of Lehman Brothers and a global downturn.
This graph, from Brewer Dolphin’s Stephen Ford, shows the story:
This graph, from Brewer Dolphin’s Stephen Ford, shows the story:
Turn of the millennium to date on the FTSE 100 and a new high achieved today pic.twitter.com/pRmHLfJ5sb
Turn of the millennium to date on the FTSE 100 and a new high achieved today pic.twitter.com/pRmHLfJ5sb
4.57pm GMT
4.57pm GMT
16:57
16:57
1999 was truly a dark time....
1999 was truly a dark time....
The last time the FTSE 100 was this high Westlife were number 1 with I Have A Dream-slash-Seasons In The Sun
The last time the FTSE 100 was this high Westlife were number 1 with I Have A Dream-slash-Seasons In The Sun
4.45pm GMT
4.45pm GMT
16:45
16:45
FTSE 100 sets new closing high
FTSE 100 sets new closing high
The FTSE 100 has just closed at a record high, finishing the day at 6949.63 points. That’s a gain of 37 points today, or 0.5%.
The FTSE 100 has just closed at a record high, finishing the day at 6949.63 points. That’s a gain of 37 points today, or 0.5%.
The intraday record high was set a few minutes earlier, at 6958.89.
The intraday record high was set a few minutes earlier, at 6958.89.
So, we can finally put the 1999 record highs to bed.
So, we can finally put the 1999 record highs to bed.
4.35pm GMT
4.35pm GMT
16:35
16:35
Chris Beauchamp, senior market analyst at IG, confirms that Greek relief helped to drive the London stock market higher.
Chris Beauchamp, senior market analyst at IG, confirms that Greek relief helped to drive the London stock market higher.
With Grexit risks dampened, traders are now looking forward to the launch of the European Central Bank’s monetary stimulus programme.
With Grexit risks dampened, traders are now looking forward to the launch of the European Central Bank’s monetary stimulus programme.
Beauchamp explains:
Beauchamp explains:
We can stop worrying about Greece for now. With this worry removed it looks like stock markets are free to power ahead, especially as the start of ECB QE looms.
We can stop worrying about Greece for now. With this worry removed it looks like stock markets are free to power ahead, especially as the start of ECB QE looms.
4.24pm GMT
4.24pm GMT
16:24
16:24
Greek relief is only one factor that pushed the FTSE 100 over its previous alltime high this afternoon.
Greek relief is only one factor that pushed the FTSE 100 over its previous alltime high this afternoon.
The final push came as Federal Reserve chair Janet Yellen testified to the Senate. She said it was unlikely that the Fed would raise interest rates in the next few months; the prospect of looser monetary policy cheered investors in Europe and New York.
The final push came as Federal Reserve chair Janet Yellen testified to the Senate. She said it was unlikely that the Fed would raise interest rates in the next few months; the prospect of looser monetary policy cheered investors in Europe and New York.
A small rise in the oil price today also helped energy shares, while mining stocks have benefitted from better-than-feared results from Anglo-Australian miner BHP Billiton. BHP’s shares are up almost 7% today.
A small rise in the oil price today also helped energy shares, while mining stocks have benefitted from better-than-feared results from Anglo-Australian miner BHP Billiton. BHP’s shares are up almost 7% today.
Updated
Updated
at 5.28pm GMT
at 5.28pm GMT
4.14pm GMT
16:14
4.03pm GMT
16:03
FTSE 100 HITS RECORD HIGH
Britain’s FTSE 100 index of blue-chip shares has hit a new alltime high, breaking through its dot-com record.
Relief that Greece’s bailout crisis has eased today has pushed the Footsie through the 6950 point mark, reached on the final trading day in December 1999.
It’s currently hovering around 6954 points, and on track to close at a new record high too (the old record closing is 6930, also set on 30 December ‘99).
Updated
at 4.15pm GMT
3.58pm GMT
15:58
Greek news agency ANA- MPA has also heard that some Greek government ministers raised objections to the bailout plan at today’s cabinet meeting [as Helena reported earlier].
Enikos.gr has the story:
Ministers and members of governing coalition partner Syriza on Tuesday expressed their reservations on the list of reforms the Greek government sent to its lenders during a cabinet meeting, state news agency ANA-MPA reported.
The list was approved in the afternoon, according to an announcement by the European Commission.
Citing a government source, the agency said Energy Minister Panagiotis Lafazanis raised objections over some measures included in the list, while other ministers asked for more detail.
In his letter to Eurogroup President Jeroen Dijsselbloem, Finance Minister Yanis Varoufakis pledged not to roll back privatisations which have been concluded or are in an advanced phase. One of them involves the tender for the sale of power grid operator ADMIE, a subsidiary of public power utility PPC. Lafazanis has objected to the sale.
3.34pm GMT
15:34
Greek stock market jumps 10%
The Greek stock market has surged by 10% today, to close at its highest level in two and a half months.
Bank shares gained up to 20%, as bailout relief swept the Athens stock market. The main ATG index finished the day up 85 points at 910.
That’s the highest close since December 09 2014, the day after former prime minister secured a two-month bailout extension and called snap presidential elections (triggering last month’s general election).
Updated
at 3.34pm GMT
3.22pm GMT
15:22
Reports are filtering through that the atmosphere at the Greek government’s cabinet session this morning was very heavy, with enraged ministers openly objecting to the aid extension agreement signed in Brussels last week.
From Athens, Helena Smith reports:
The energy minister Panagiotis Lafazanis, who heads Syriza’s militant Left Faction, emerged from the meeting “seeing red” according to reporters who were there.
Syriza’s parlimentary group will now hold an emergency meeting at 8pm (6pm GMT) tonight.
Updated
at 3.22pm GMT
3.09pm GMT
15:09
ECB approves four-month Greek extension, but....
Mario Draghi, the president of the European Central Bank, has given his approval to Greece’s four-month bailout extension, but also flagged up concerns in a letter to eurogroup chief Jeroen Dijsselbloem.
Draghi isn’t completely happy with the lack of detail in Greek reform plan. And the ECB (one of Greece’s three creditors) wants convincing that any new economic reforms are at least as good as the ones in the existing bailout agreement.
Draghi says:
Dear Jeroen,
My Staff has reviewed the list of measures which the Greek authorities submitted yesterday evening. Our initial impression is that the document covers a wide range of reform areas and in this sense, it is sufficiently comprehensive to be a valid starting point for a successful conclusion of the review. However, as we expected it was not possible for the authorities to elaborate on concrete proposals and commitments that can be assessed by the institutions in respect to growth, public finances and financial stability. Given the very limited time available, this is understandable.
I assume that it is clear that the basis for concluding the current review, and also for any future arrangements, will be the existing commitments in the current Memorandum of Understanding and the Memorandum of Economic and Financial Policies (MEFP). In this context we note that the commitments outlined by the authorities differ from existing programme commitments in a number of areas. In such cases, we will have to assess during the review whether measures which are not accepted by the authorities are replaced with measures of equal or better quality in terms of achieving the objectives of the programme.
I would also again urge the Greek authorities to act swiftly to stabilise the payment culture and refrain from any unilateral action to the contrary.
With best regards,
[signed] Mario Draghi
Updated
at 3.14pm GMT
3.00pm GMT
15:00
Damage limitation exercise underway in Greece
Back in Athens, the government is trying to calm fears that it has caved into its lenders.
Our correspondent Helena Smith reports:
The government has now distributed a six-page “non-paper”, outlining the points in the “Thessaloniki programme” [Tsipras’s anti-austerity manifesto] which are included in the list of reforms. That’s aimed at the growing number of critics within his own party.
Prime minister Alexis Tsipras outlined his radical left Syriza party’s economic policies in Thessaloniki, Greece’s northern capital, last September - pledging to enact them when he assumed office.
The paper points out that the new government will begin by alleviating “the needs that have emerged with the recent rise of total poverty” saying, where needed, it will provide food, shelter, health services and basic energy.
The hand-outs will be given in such a way that they help reform the public administration and clamp down on bureaucracy and corruption. Efforts to alleviate the humanitarian crisis will, it insists, not have a negative impact on the fiscal budget.
The note continues with a run-down of how the anti-austerity leftist-led coalition will lure foreign investment (by pressing ahead with privatisations), kickstart employment opportunities, improve the business environment, tax collecting revenues and target oil smuggling and other forms of tax evasion by the country’s wealthy elite.
One finance ministry source confided:
“It’s really nobody else’s business how we deal with our finances internally as long as we are keeping balanced budgets.”
2.56pm GMT
14:56
Christine Lagarde ends her letter with a serious warning -- as things stand, the policy proposals outlined by Greece are not enough to ensure a successful review of its IMF programme (which runs until 2016)
Here's link on @FT's website of complete @Lagarde letter to @J_Dijsselbloem on #Greece. Key sentence at page turn: http://t.co/rUcwoWNMAV
Updated
at 2.56pm GMT
2.52pm GMT
14:52
Once EC/IMF/ECB/Eurogroup have all approved extension, each EZ member needs to sign off. Parliaments in FIN, DE, SK, AU & NL need to vote it
2.52pm GMT
14:52
The IMF’s concerns probably won’t stop eurozone parliaments approving Greece’s four-month bailout extension, but it’s another sign that the next few months will be tricky for Greece.
2.46pm GMT
14:46
IMF raises concerns over Greek plans
Hold the euphoria. The International Monetary Fund has written to the eurogroup, criticising elements of the Greek government’s reform plans.
Christine Lagarde says that:
Whilst the authorities list is comprehensive, it is not very specific, which is perhaps to be expected considered the government is new in office.
In the letter, just released, Lagarde welcomes signs of “stronger resolve” on tax evasion and corruption, but then warns:
We note in particular that there are neither clear commitments to design and implement the envisaged comprehensive pension and VAT policy reforms nor unequivocal undertakings to continue already-agreed policies for opening up closed sectors, for administrative reforms, for privatisation, and for labour market reforms.
Those undertakings are essential to Greece’s ability to meet the basic objectives of its programme agreed with the IMF, Lagarde adds.
Yikes! #IMF not on board with approval of #Greece list. Excerpt from letter from @Lagarde to @J_Dijsselbloem pic.twitter.com/2nx20p8RV2
Updated
at 2.54pm GMT
2.37pm GMT
14:37
Eurogroup statement released
The European Parliament has confirmed that finance ministers has approved extending Greece’s bailout programme by four months.
But, in a brief statement, the ministers also want Athens to flesh out its reform measures.
It says:
The Eurogroup today discussed the first list of reform measures presented by the Greek authorities, based on the current arrangement, which will be further specified and then agreed with the institutions at the latest by the end of April. The institutions [IMF/ECB/EU] provided us with their first view that they consider this list of measures to be sufficiently comprehensive to be a valid starting point for a successful conclusion of the review.
We therefore agreed to proceed with the national procedures with a view to reaching the final decision on the extension by up to four months of the current Master Financial Assistance Facility Agreement.
We call on the Greek authorities to further develop and broaden the list of reform measures, based on the current arrangement, in close coordination with the institutions in order to allow for a speedy and successful conclusion of the review.
#Eurogroup statement on #Greece, following today's conference call: http://t.co/uj4K8UeTr2.
Updated
at 2.39pm GMT
2.22pm GMT
14:22
Sky’s Ed Conway says that the eurogroup wants Greece to make some changes to its reform programme, and we might get the details later...
Eurogroup teleconference lasted abt an hour. Hearing there's likely to be amendments to reform list. Greek fin ministy to announce them soon
In the meantime, though, Greece’s immediate funding needs should be covered.
Euro zone finance ministers have approved Greece's reform plan so paving the way for Greece to receive a further tranche of bail-out funds
2.13pm GMT
14:13
I've had confirmation from my own EU sources. #Eurogroup has approved Greek list of reforms. Teleconference ended a moment ago
2.12pm GMT
14:12
Eurozone approves Greek bailout extension
IT’S OFFICIAL. The eurozone finance ministers have approved Greece’s four-month bailout extension, after a one-hour conference call in which they scrutinised Athens’ reform programme.
Valdis Dombrovskis, commissioner for the euro, tweets the news:
Following #Eurogroup teleconference decision national procedures for extension of the Greek programme can begin #Greece
Now the ball is passed to national parliaments, who must give their own approval. Germany is the key vote -- on Friday.
Reuters has also had the news confirmed by a Greek finance minister:
* Greek Finance Minister official says Eurogroup approves Greek reform plan - RTRS
2.06pm GMT
14:06
Slovak minister says deal "holds"
The Slovakian finance minister’s media team has tweeted that the Greek bailout deal “holds”.
They add that the eurozone is eager to see firm details on Athens’ plans in the weeks ahead.
#eurozone deal with #Greece reached on Fri holds. Greeks have lots of heavy-lifting to do until end-April. We all want to see numbers now.
Peter Kažimír should have taken part on the eurogroup conference call, of course, so he should know the result.
Updated
at 2.08pm GMT
2.02pm GMT
14:02
Crisis delayed, but perhaps not denied?
Crisis averted, until, like April. (BN) *GREEK AID EXTENSION SAID TO BE APPROVED BY EURO-AREA MINIS TERS
1.58pm GMT
13:58
Newsflash from Bloomberg, saying the eurozone finance ministers have approved Greece’s reform package.
Greek bailout extension said to be approved by Euro area Bloomberg
I can’t see anything official yet, though.....
1.45pm GMT
13:45
Our Europe editor predicts a lively few months ahead....
#grexit looks like @tsipras_eu passes first test. loadsa fun to come tho
1.15pm GMT
13:15
12.58pm GMT
12:58
OECD chief Angel Gurria spoke about the Greek crisis in London today:
OECD Gurria: "we have been working with Greek govt now for many many years and we are happy to support the new govt" pic.twitter.com/850MbGsLC3
OECD Gurria on Greece talks says want to express "hope and support that clearly there should be a convergence"
12.57pm GMT
12:57
Lunchtime summary
A brief recap.
Eurozone finance ministers are getting ready to hold a eurogroup conference call to decide whether to accept a list of economic reforms proposed by the Greek government last night.
If they give the green light, Greece will be on the brink of securing a four-month bailout extension.
The European Commission has given its backing to the reforms. In a letter to the eurogroup, just released, the EC says the list is “sufficiently comprehensive” to be a valid starting point for a successful conclusion of the review, adding:
We are encouraged by the commitment to combat tax evasion and corruption, inter alia through efforts to modernise tax and custom administrations, as well as to pursue reforms to modernise the public administration.
The Commission also notes the commitments in the area of statistics and considers it of vital importance that the institutional and operational independence of ELSTAT and its senior management be respected at all times.
More here: Letter by Vice-President Valdis Dombrovskis and Commissioner Pierre Moscovici to the President of the Eurogroup, Jeroen Dijsselbloem, on the Greek government’s reform proposals
The full list of Greek reforms arrived in Brussels around midnight last night, and was published by Reuters this morning. It shows that Athens is committing to tax reforms, reforming public spending and the labour markets, helping the poorest, and driving growth.
But Greece has also fallen into line; pledging that not to unwind state privatisations, to stick to budget targets while fighting the humanitarian crisis, and to consult with its partners before raising the minimum wage.
Analysts predict that Greece has made enough concessions to win approval from Brussels...
....which means it may face a battle to get the reforms through the Athens parliament.
Prime minister Tsipras has already met with one vocal crisis of austerity - composer Mikis Theodorakis.
And he’s received a rare compliment from one of Greece’s bishops.
RT @BrunoTersago Salonica bishop #Anthimos,repeatedly preaching against left-wing political parties,gave his blessing to #Tsipras #Grčija
National governments still need to give their approval. Germany’s finance minister has already urged the Bundestag to give its support, at a vote on Friday.
Eurogroup chief Jeroen Dijsselbloem has insisted that Greece will not leave the eurozone, in an appearance before MEPs this morning.
In the markets, Greek bonds and stocks have rallied, on relief that a deal was reached on Friday night (it was closed yesterday).
Updated
at 1.06pm GMT
12.41pm GMT
12:41
#grexit @eu_comission tells @J_Dijsselbloem 'we are encouraged' by greek reform menu. 'determined swift implementation will be key'.
12.34pm GMT
12:34
EC: Greek reforms are 'sufficiently comprehensive'
Newsflash from Brussels.... the Commission has digested the long list of reforms emailed by Greece last night (see earlier post) and concluded that they are “sufficiently comprehensive” to pass muster.
However, it wants to see these commitments turned into actual actions.
12.29pm GMT
12:29
Here’s your daily reminder of the debt repayments Greece faces this year:
#Greece debt repayments due: March €1.4bn June €1.4bn July €3.5bn August €3.2bn Sept €1.4bn Dec €1.4bn pic.twitter.com/6gp3w2nddt via @ALeipold
12.28pm GMT
12:28
Life may get harder for the new Greek government when it tries to get its reform plans into law.
Joan Hoey, senior analyst at the Economist Intelligence Unit, predicts tough battles in the Athens parliament, which could even bring down Alexis Tsipras’s government.
She says:
“Syriza is already facing criticism and dissent within its own ranks and may also encounter opposition from its coalition partner, the anti-bailout Independent Greeks. We expect implementation difficulties, given previous strong commitments made by Syriza to reverse previous reforms, stop privatisation, restore the minimum wage, etc, commitments which it has now had to drop.
The issues on which the previous government fell—austerity and reform implementation—will not go away. The prospect is therefore for continued political instability in Greece and we forecast that the coalition will not last longer than 12–18 months. We continue to assign a 40% risk to a Grexit”.
That last comment won’t please Jeroen Dijsselbloem, given his promise that Greece’s future in the eurozone isn’t under debate....
12.04pm GMT
12:04
Greek bishop backs government over reforms
Greece’s deputy minister in charge of administrative reform has warned that the newly-installed government is ready for a fight – dispelling accusations that the Syriza-led administration is about to conduct a major u-turn.
Helena Smith reports from Athens:
“Negotiations will continue, they are not going to stop here,” said Giorgos Katrougalos, a former MEP with the radical left party. The government, he said, was bracing for a reaction, that might not be all good, following submission of its priority reforms.
“Of course we are ready for a clash,” said the politician who announced at the weekend that he would give up his post if “certain red lines” weren’t respected. Quarrelling was part of the negotiation process, said Katrougalos, describing the deal Athens had managed to strike as “the best possible” in that it gave the debt-stricken` country the breathing space to properly prepare a better package of reforms to transform Greece.
It’s early days, yet, but there is mounting consensus among politicians and analysts that the list of reforms strikes a harmonious balance in appeasing both domestic and European audiences.
“The big question is will they be able to deliver,” said Dr Eleni Panagiotarea, senior research fellow at Athens’ leading think tank Eliamep.
“That is going to be vital to restoring the trust and credibility deficit Greece has suffered.”
But this morning even the church (no friend of the atheist Syriza) has come out batting for the Greek premier Alexis Tsipras and Yanis Varoufakis, his finance minister.
Bishop Anthimos of Thessaloniki, among the country’s most hardline clerics, heaped praise on the two politicians saying, firstly, both have a:
“high intellectual calibre, secondly they believe in what they are trying to achieve, and thirdly they have the persistence and clarity to continually change what they want so that they arrive at a good result … that is, they are two men who are fighting and struggling. We have to recognise that.”
Updated
at 3.10pm GMT
11.59am GMT
11:59
Updated
at 11.59am GMT
11.56am GMT
11:56
OECD warns UK must fix productivity problem to raise living standards. Story and key charts from today's report http://t.co/okkyQKNaYJ
11.53am GMT
11:53
OECD congratulates George Osborne
Christmas has come early for chancellor George Osborne. The head of the OECD is congratulating him on the economic recovery, and urging the UK to stick with the current plan.
OECD head Gurria: "Britain has a long term economic plan but it must stick with it" pic.twitter.com/0WDw7BnmMf
It’s all a bit sickly for some...
Gurria on uk's labour market reforms - "textbook" and "best practice". The love in is getting embarrassing ...
Tough talk from OECD head Gurria: “My main message today is well done. Well done Chancellor.”
Updated
at 11.54am GMT
11.47am GMT
11:47
Over in London, the Organisation for Economic Co-operation and Development (OECD) is presenting a report on the UK economy.
And it’s warning that Britain must fix its productivity problem to secure future economic growth and improve living standards.
OECD warns UK must solve productivity problems to raise living standards. Am tweeting from report launch at Treasury pic.twitter.com/Afo45ZSTyH
The OECD also lowered its forecast for UK growth this year by a smidgen, from 2.7% to 2.6%; still faster than most rivals.
Angel Gurria, head of the OECD, says the UK economy is performing rather well:
OECD head Gurria says UK labour market performance has been "remarkable", economic growth last year fastest on g7
OECD head Gurria: "a swallow does not a spring make but real wages are on the rise" "what a difference effective economic policies can make"
11.34am GMT
11:34
One man’s sensible compromise is another man’s shameful capitulation, of course.
Any deal that is waved through by the eurogroup is likely to fuel criticism from those in Greece who expected Syriza to defy their creditors.
Syriza response though will be massive let down to those who wanted Greece to lead a charge to something diff in EZ
Looks like a solid list of sensible reforms. No wonder Troika happy. Question now is whether Syriza can deliver. http://t.co/Cf07i7j0Er
11.27am GMT
11:27
The Greek stock market is still soaring, up over 7% today.
How stock market reacted to news Greek reform list welcomed in Brussels HT @YahooFinance #Greece pic.twitter.com/YgFC4gq857
National Bank of Greece, one of its largest lenders, is up almost 14% followed by Alpha Bank (+13%), and Piraeus Bank (+11%).
However.... Dromeas Office Furniture Industry tumbled by 8.5% after the reform plans were released. They supply a lot of equipment to the government, so could be hit by the plan to find “cost saving measures through a thorough spending review of every Ministry”.
11.15am GMT
11:15
You might find this pdf of Greece’s reform proposals a little easier to read (it’s the same as the version posted earlier).
Just got my mitts on pdf of #Greece's 6-page letter to @J_Dijsselbloem on promised economics reforms. Posted here: http://t.co/np0ro8uK9v
11.05am GMT
11:05
Greek proposal: what the experts say
Greece’s reforms plan looks like a sensible compromise between the Greek government’s promises and the demands of its creditors, commentators say.
Greek journalist Nick Malkoutzis reckons the pledge to ‘modernise’ pensions could cause ructions:
Pensions & privatisations 2 of thorny issues in govt's reform proposals. A lot of other content likely to have broad support though #Greece
Eurocrisis expert Yanni Kouts is confident eurozone ministers will give it the green light:
This list will be approved by the Eurogroup, even w reservations. It's much more comprehensive & detailed than what was 'leaked'. #Greece
Newnight’s Duncan Weldon says the deal looks like a sensible compromise.
The big picture: Greek reform programme well short of Syriza election programme but with important wins for the new government.
And Dan Davies of Frontline Analysts flags up that Greece’s government has given ground in some key areas, including labour reform:
nothing specific but I *think* "EU/ILO best practice", in the absence of any other comment means Syriza gave up on mass layoff rules
"a new, 'smart' approach to collective bargaining" sounds pretty ominous for Greek labour unions, who have never liked either new or smart
So on the important things - minimum wage kicked into long grass, foreclosures they crumbled, pensions they got a bit
10.50am GMT
10:50
Newsflash: eurozone finance ministers will hold a conference call at 2pm Brussels time (1pm GMT or 3pm EET) to discuss Greece’s plan.
#Eurogroup conference call on Greece at 14.00 this afternoon.
10.45am GMT
10:45
Here’s the full Greek reforms list
Reuters has now published the full text of Greece’s reforms.
At first glance it is broadly as expected -- lot of commitments to reform the tax base, fight corruption, and improve Greece’s public sector.
There are also several clear concessions to its creditors. Athens is pledging not to reverse the state asset sales that are already underway. And it says it will aim to raise minimum wages in a manner that “safeguards competiveness and employment prospects”, and in consultation with its partners.
The government is also promising help for families and businesses who simply cannot pay their debt, while clamping down hard on “strategic defaulters”.
It’s rather long, but I’ve pasted it in full here
I. Fiscal structural policies
Tax policies – Greece commits to:
Reform VAT policy, administration and enforcement. Robust efforts will be made to improve collection and fight evasion making full use of electronic means and other technological innovations. VAT policy will be rationalised in relation to rates that will be streamlined in a manner that maximises actual revenues without a negative impact on social justice, and with a view to limiting exemptions while eliminating unreasonable discounts.
Modify the taxation of collective investment and income tax expenditures which will be integrated in the income tax code.
Broaden definition of tax fraud and evasion while disbanding tax immunity.
Modernising the income tax code and eliminating from it tax code exemptions and replacing them, when necessary, with social justice enhancing measures.
Resolutely enforce and improve legislation on transfer pricing.
Work toward creating a new culture of tax compliance to ensure that all sections of society, and especially the well-off, contribute fairly to the financing of public policies. In this context, establish with the assistance of European and international partners, a wealth database that assists the tax authorities in gauging the veracity of previous income tax returns.
Public Finance Management
Greece will:
Adopt amendments to the Organic Budget Law and take steps to improve public finance management. Budget implementation will be improved and clarified as will control and reporting responsibilities. Payment procedures will be modernised and accelerated while providing a higher degree of financial and budgetary flexibility and accountability for independent and/or regulatory entities.
Devise and implement a strategy on the clearance of arrears, tax refunds and pension claims.
Turn the already established (though hitherto dormant) Fiscal Council into a fully operational entity.
Revenue administration
Greece will modernise the tax and custom administrations benefiting from available technical assistance. To this end Greece will: Enhance the openness, transparency and international reach of the process by which the General Secretary of the General Secretariat of Public Revenues is appointed, monitored in terms of performance, and replaced.
Strengthen the independence of the General Secretariat of Public Revenues (GSPR), if necessary through further legislation, from all sorts of interference (political or otherwise) while guaranteeing full accountability and transparency of its operations. To this end, the government and the GSPR will make full use of available technical assistance.
Staff adequately, both quantitatively and qualitatively, the GSPR and in particular the high wealth and large debtors units of the revenue administration and ensure that it has strong investigative/prosecution powers, and resources building on SDOE’s capacities, so as to target effectively tax fraud by, and tax arrears of, high income social groups. Consider the merits of integrating SDOE into GSPR.
Augment inspections, risk-based audits, and collection capacities while seeking to integrate the functions of revenue and social security collection across the general government.
Public spending –
The Greek authorities will: Review and control spending in every area of government spending (e.g. education, defence, transport, local government, social benefits)
Work toward drastically improving the efficiency of central and local government administered departments and units by targeting budgetary processes, management restructuring, and reallocation of poorly deployed resources.
Identify cost saving measures through a thorough spending review of every Ministry and rationalisation of non-salary and non-pension expenditures which, at present, account for an astounding 56% of total public expenditure.
Implement legislation (currently in draft form at the General Accounts Office – GAO) to review non-wage benefits expenditure across the public sector.
Validate benefits through cross checks within the relevant authorities and registries (e.g. Tax Number Registry, AMKA registry) that will help identify non-eligible beneficiaries.
Control health expenditure and improve the provision and quality of medical services, while granting universal access. In this context, the government intends to table specific proposals in collaboration with European and international institutions, including the OECD.
Social security reform –
Greece is committed to continue modernising the pension system. The authorities will: Continue to work on administrative measures to unify and streamline pension policies and eliminate loopholes and incentives that give rise to an excessive rate of early retirements throughout the economy and, more specifically, in the banking and public sectors.
Consolidate pension funds to achieve savings.
Phase out charges on behalf of ‘third parties’ (nuisance charges) in a fiscally neutral manner.
Establish a closer link between pension contributions and income, streamline benefits, strengthen incentives to declare paid work, and provide targeted assistance to employees between 50 and 65, including through a Guaranteed Basic Income scheme, so as to eliminate the social and political pressure for early retirement which over-burdens the pension funds.
Public administration & corruption – Greece wants a modern public administration. It will: Turn the fight against corruption into a national priority and operationalize fully the National Plan Against Corruption.
Target fuel and tobacco products’ smuggling, monitor prices of imported goods (to prevent revenue losses during the importation process), and tackle money laundering. The government intends immediately to set itself ambitious revenue targets, in these areas, to be pursued under the coordination of the newly established position of Minister of State.
Reduce (a) the number of Ministries (from 16 to 10), (b) the number of ‘special advisors’ in general government; and (c)
fringe benefits of ministers, Members of Parliament and top officials (e.g. cars, travel expenses, allowances)
Tighten the legislation concerning the funding of political parties and include maximum levels of borrowing from financial and other institutions.
Activate immediately the current (though dormant) legislation that regulates the revenues of media (press and electronic), ensuring (through appropriately designed auctions) that they pay the state market prices for frequencies used, and prohibits the continued operation of permanently loss-making media outlets (without a transparent process of recapitalisation)
Establish a transparent, electronic, real time institutional framework for public tenders/procurement – re-establishing DIAVGEIA (a side-lined online public registry of activities relating to public procurement)
Reform the public sector wage grid with a view to decompressing the wage distribution through productivity gains and appropriate recruitment policies without reducing the current wage floors but safeguarding that the public sector’s wage bill will not increase Rationalise non-wage benefits, to reduce overall expenditure, without imperilling the functioning of the public sector and in accordance with EU good practices Promote measures to: improve recruitment mechanisms, encourage merit-based managerial appointments, base staff appraisals on genuine evaluation, and establish fair processes for maximising mobility of human and other resources within the public sector
II. Financial stability
Instalment Schemes.
Greece commits to:
Improve swiftly, in agreement with the institutions, the legislation for repayments of tax and social security arrears Calibrate instalment schemes in a manner that helps discriminate efficiently between: (a) strategic default/non-payment and (b) inability to pay; targeting case (a) individuals/firms by means of civil and criminal procedures (especially amongst high income groups) while offering case (b) individuals/firms repayment terms in a manner that enables potentially solvent enterprises to survive, averts free-riding, annuls moral hazard, and reinforces social responsibility as well as a proper re-payment culture.
De-criminalise lower income debtors with small liabilities
Step up enforcement methods and procedures, including the legal framework for collecting unpaid taxes and effectively implement collection tools
Banking and Non-Performing loans.
Greece is committed to: Banks that are run on sound commercial/banking principles Utilise fully the Hellenic Financial Stability Fund and ensure, in collaboration with the SSM, the ECB and the European Commission, that it plays well its key role of securing the banking sector’s stability and its lending on commercial basis while complying with EU competition rules.
Dealing with non-performing loans in a manner that considers fully the banks’ capitalisation (taking into account the adopted Code of Conduct for Banks), the functioning of the judiciary system, the state of the real estate market, social justice issues, and any adverse impact on the government’s fiscal position.
Collaborating with the banks’ management and the institutions to avoid, in the forthcoming period, auctions of the main residence of households below a certain income threshold, while punishing strategic defaulters, with a view to: (a) maintaining society’s support for the government’s broad reform program, (b)
preventing a further fall in real estate asset prices (that would have an adverse effect on the banks’ own portfolio), (c)
minimising the fiscal impact of greater homelessness, and (d)
promoting a strong payment culture. Measures will be taken to support the most vulnerable households who are unable to service their loans Align the out-of-court workout law with the instalment schemes after their amendment, to limit risks to public finances and the payment culture, while facilitating private debt restructuring.
Modernise bankruptcy law and address the backlog of cases
III. Policies to promote growth
Privatisation and public asset management:
To attract investment in key sectors and utilise the state’s assets efficiently, the Greek authorities will: Commit not to roll back privatisations that have been completed. Where the tender process has been launched the government will respect the process, according to the law.
Safeguard the provision of basic public goods and services by privatised firms/industries in line with national policy goals and in compliance with EU legislation.
Review privatisations that have not yet been launched, with a view to improving the terms so as to maximise the state’s long term benefits, generate revenues, enhance competition in the local economies, promote national economic recovery, and stimulate long term growth prospects.
Adopt, henceforth, an approach whereby each new case will be examined separately and on its merits, with an emphasis on long leases, joint ventures (private-public collaboration) and contracts that maximise not only government revenues but also prospective levels of private investment.
Unify (HRDAF) with various public asset management agencies (which are currently scattered across the public sector) with a view to developing state assets and enhancing their value through microeconomic and property rights’ reforms.
Labor market reforms
Greece commits to:
Achieve EU best practice across the range of labour market legislation through a process of consultation with the social partners while benefitting from the expertise and existing input of the ILO, the OECD and the available technical assistance.
Expand and develop the existing scheme that provides temporary employment for the unemployed, in agreement with partners and when fiscal space permits and improve the active labour market policy programmes with the aim to updating the skills of the long term unemployed.
Phasing in a new ‘smart’ approach to collective wage bargaining that balances the needs for flexibility with fairness. This includes the ambition to streamline and over time raise minimum wages in a manner that safeguards competiveness and employment prospects. The scope and timing of changes to the minimum wage will be made in consultation with social partners and the European and international institutions, including the ILO, and take full account of advice from a new independent body on whether changes in wages are in line with productivity developments and competitiveness.
Product market reforms and a better business environment
As part of a new reform agenda, Greece remains committed to:
Removing barriers to competition based on input from the OECD.
Strengthen the Hellenic Competition Commission.
Introduce actions to reduce the burdens of administrative burden of bureaucracy in line with the OECD’s input, including legislation that bans public sector units from requesting (from citizens and business) documents certifying information that the state already possesses (within the same or some other unit).
Better land use management, including policies related to spatial planning, land use, and the finalisation of a proper Land Registry Pursue efforts to lift disproportionate and unjustified restrictions in regulated professions as part of the overall strategy to tackle vested interests.
Align gas and electricity market regulation with EU good practices and legislation Reform of the judicial system – The Greek government will: Improve the organisation of courts through greater specialisation and, in this context, adopt a new Code of Civil Procedure.
Promote the digitisation of legal codes and the electronic submission system, and governance, of the judicial system.
Statistics – The Greek government reaffirms its readiness to: Honour fully the Commitment on Confidence in Statistics, and in particular the institutional independence of ELSTAT, ensuring that ELSTAT has the necessary resources to implement its work programme.
Guarantee the transparency and propriety of the process of appointment of the ELSTAT President in September 2015, in cooperation with EUROSTAT.
IV. Humanitarian Crisis –
The Greek government affirms its plan to:
Address needs arising from the recent rise in absolute poverty (inadequate access to nourishment, shelter, health services and basic energy provision) by means of highly targeted non-pecuniary measures (e.g. food stamps).
Do so in a manner that is helpful to the reforming of public administration and the fight against bureaucracy/corruption (e.g. the issuance of a Citizen Smart Card that can be used as an ID card, in the Health System, as well as for gaining access to the food stamp program etc.).
Evaluate the pilot Minimum Guaranteed Income scheme with a view to extending it nationwide.
Ensure that its fight against the humanitarian crisis has no negative fiscal effect.
Updated
at 10.46am GMT
10.20am GMT
10:20
PM Tsipras meets anti-austerity critic
Over in Athens, prime minister Alexis Tsipras has just ended a meeting with one of the country’s leading anti-austerity voices, the celebrated composer Mikis Theodorakis.
Our correspondent Helena Smith reports that the meeting was organized after the academy award-winning composer penned a lacerating letter in which Theodorakis called for Tsipras’ radical-left Syriza party “to find the strength, even now, to say OXI [NO] to [German finance minister Wolfgang] Schäuble’s ‘NEIN.’
Helena writes:
Tsipras, it has emerged, telephoned the composer to congratulate him on the statement shortly after its release!
The meeting, which took place before a cabinet meeting at 12pm local time (10am), is aimed at nixing the mounting dissent within Syriza’s ranks over what is perceived to be the government’s climbdown in Brussels last week.
The dissatisfaction will be the focus of debate (along with the reform package the finance ministry assembled yesterday) at the cabinet meeting.
Costas Lapavitsas, the noted London University economics professor who is now a Syriza MP (and belongs to the party’s hard left faction) has just told STAR TV that Syriza would have “no reason to exist” in government if it does not enforce its pre-election pledges.
The discontent is such that 50 members of the party’s Central Committee this morning demanded an emergency meeting of the body to discuss what was described as a “critical political juncture.” The dissenters want to be “properly informed” about the new aid extension deal Greece has signed up to.
Updated
at 10.22am GMT
10.15am GMT
10:15
Analyst Hugo Dixon of Breaking Views has given the thumbs-up to Greece’s plan (see last post)
1 On first read, Greek list of reform measures looks pretty good. Lots of stuff on combatting tax evasion, corruption, special privileges
2 No red rags from Greece either: eg minimum wage only raised over time in way that safeguards competitiveness, no privatisation rollback
3 even Greece's humanitarian programme (eg food stamps) is supposed to have no negative fiscal effect
10.11am GMT
10:11
Reuters: Greece pledges to respect privatisations and protect budget
Greece’s reforms list includes a pledge not to roll back any state asset privatisations, according to Reuters, which has seen a copy this morning.
It also includes a pledge that the efforts to address Greece’s humanitarian crisis will not “hurt” its budgets (ie, push them back into deficit).
And Athens is also offering to consult over plans to raise the minimum wage, and suggesting that wage rises for lower-paid workers would be offset with cuts for wealthier workers.
Reuters Mattias Sobolewski writes:
The list also includes pledges to reform tax policy, review and control spending in “every area” of government spending.
It also commits 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 stated objective to avoid any further pension cuts as previously demanded by EU and IMF inspectors.
Athens also said it would reform the public sector wage grid in a way that would not reduce wages further but would ensure that the overall public wage bill does not rise. It also said it would phase in collective wage bargaining with a view to raising the minimum wage over time, but that any such rise would be made in consultation with European and other partners.
This may well satisfy the eurogroup.
10.04am GMT
10:04
My webfeed of Dijsselbloem’s appearance has now crashed.
But apparently the eurogroup chief is explaining that last month’s Greek general election can’t change the way the whole eurozone operates.
The Telegraph’s Bruno Waterfield has the details:
Syria a clear message form Greek voters but 18 other electorates, says @J_Dijsselbloem. Eurozone pits people's against each other
Basically, @J_Dijsselbloem is admitting that if a people want to decide own economic policies, social democracy, then must leave euro
Interesting. @J_Dijsselbloem announces that eurozone is a political union. I wonder if voters in France, Netherlands, +16 have been told yet
9.53am GMT
09:53
Dijsselbloem looks in cheery mood this morning:
Updated
at 9.55am GMT
9.48am GMT
09:48
It’s possible that Greece could get some form of debt relief in future, once it has met all the targets in its existing programme, Dijsselbloem says.
Eurogroup’s Dijsselbloem: If Greece Meets All Criteria, EZ Ministers Could Consider Further Debt Relief Measures
9.43am GMT
09:43
Ouch! Jeroen Dijsselbloem tells MEPs that only one country held a meeting to discuss the dangers of Greece leaving the eurozone -- and that was Britain.
That’s a reference to the emergency meeting chaired by David Cameron two weeks ago, as the Greek bailout crisis escalated.
Maybe the UK government would argue that their pressure helped get the two sides together?
ECB, Germany, EC and Dutch government (with @J_Dijsselbloem in cabinet) discussed Greece leaving euro in 2012. His comments not credible
9.31am GMT
09:31
The eurozone will stick together, Dijsselbloem insists. Grexit is not an option.
#Dijsselbloem: Agreement on Greece was necessary - but was a political challenge. #Grexit simply not on the table.
9.28am GMT
09:28
Dijsselbloem: Greek reforms will take time
Disappointing! Jeroen Dijsselbloem has ducked the opportunity to to give his opinion of Greece’s list of reforms ahead of this afternoon’s conference call.
He says the Athens government is very serious about its reform plans. However, the plan submitted last night is “just a first step” in a long process. It will take time to get into the details.
Updated
at 9.53am GMT
9.26am GMT
09:26
Apparently the Greek proposals arrived in Jeroen Dijsselbloem’s inbox at 11.15pm last night -- or shortly after midnight in Athens.
#Dijsselbloem says #Greece letter arrived in his inbox at 23:15 last night. So, no delay. But he admits trust was lost with #Tsipras gov.
9.18am GMT
09:18
Ireland remains a poster boy for the eurozone. Dijsselbloem is telling MEPs that the country is making “strong progress on all fronts”, with Irish employment growing impressively.
9.14am GMT
09:14
Jeroen Dijsselbleom has confirmed that the Greek reforms plan arrived “just in time”.
#Dijsselbloem says #Greek reform list arrived 'just in time'
9.10am GMT
09:10
Heads-up. Eurogroup chief Jeroen Dijsselbloem is testifying to the European Parliament’s Economic and Monetary affairs committee now.
He’s expected to discuss the Greek bailout.
There’s a livefeed here.
9.09am GMT
09:09
Newsflash from Berlin: the German parliament will vote on Greece’s bailout extension on Friday.
#Germany | CDU chief whip says German lawmakers will vote on #Greece Friday. /via @FerroTV
9.00am GMT
09:00
Updated
at 9.03am GMT
8.56am GMT
08:56
Will Butler releases Greek debt crisis song
The Greek debt crisis now has its own song.
Will Butler of Canadian indie rock group Arcade Fire is penning new tunes this week, inspired by something he’s read in the Guardian each day.
His first, called Clean Monday, is about Greece - having read yesterday’s liveblog (!)
Will, who says he’s ‘rooting’ for Greece’s new government, writes:
I was reading the Guardian’s live coverage of the forthcoming Greek proposals of how they’re going to pay off their debts, when a little blurb popped up explaining that the Greek markets were closed today because it was “Clean Monday” – the Greek Orthodox equivalent of Ash Wednesday. It was an amazing/hilarious (well, maybe mildly amusing) coincidence to me that the Greek ministers were scrambling and figuring out how to avoid strict austerity on the day that Lent starts.
Clean Monday is online here. Well worth a listen – Will’s twitter fans love it.
Heeere you goooooo: http://t.co/6rcVoj0AKk
Updated
at 8.59am GMT
8.39am GMT
08:39
Athens stock market cheers bailout deal
The Greek stock market is soaring, up 7.2% in early trading.
The ATG index has hit its highest level since early December 2014, with bank shares surging by around 14%.
This is Athens’ investors first chance to react to Friday night’s deal, as the market was closed yesterday for the “Clean Monday’ holiday.
Updated
at 8.40am GMT
8.26am GMT
08:26
Wolfgang Schäuble’s letter to the Bundestag also shows that Germany is determined that Greece sticks to the bailout agreement agreed in 2012, Ian Traynor adds.
It says that “the aim of the extension is the orderly conclusion of the programme review.”
La troika est morte, vive la troika...
8.19am GMT
08:19
Greek bonds rally
Greek bonds are strengthening in value this morning, as markets welcome the news that its reform plans have been submitted, and may well be approved.
This has pushed down the yield (effectively the interest rate) on Greek debts this morning, showing traders think the risk of default has fallen.
Here’s the chart of Greece’s three-year bond yield, which hit dangerously high levels following January’s general election.
#Greece's bonds rally as Greek reform measures in line w/ demands set out by #Eurozone FinMins http://t.co/K9PwJEFnpR pic.twitter.com/dtQ7sSn83Q
The yield on Greece’s 10-year debts has fallen too, from 10.1% to 9.5%.
8.02am GMT
08:02
Schäuble asks Bundestag to back Greek bailout deal
Encouraging news for Athens. The eurozone’s chief hawk, Wolfgang Schäuble, has asked German MPs to back Greece’s bailout extension.
The Handelsblatt newspaper has a copy of a four-page letter sent by Germany’s finance minister to the speaker of the Bundestag, asking for the chamber’s support for the four-month extension.
The letter says that:
“The Federal government advocates the proposed extension, against the background of Greece’s acknowledgment of its commitments and the agreement in the eurogroup.”
But time is tight, as our Europe editor Ian Traynor explains:
The Bundestag has to support last Friday’s eurogroup pact with Greece, as do a few other eurozone parliaments... though it might be argued that some parliaments are bigger than others.
If all goes well today, the Bundestag could back the package on Friday, a day before what is now called the ‘current arrangements’ expire.
#grexit monday evening schaeuble sent 4-page letter to bundestag speaker supporting 4-month bailout extension http://t.co/gDqT6D0mgJ
Updated
at 8.22am GMT
7.51am GMT
07:51
A Commission source has told Reuters that Greece’s list of reforms is “sufficiently comprehensive to be a valid starting point for a successful conclusion of the review,” adding:
“We are notably encouraged by the strong commitment to combat tax evasion and corruption.”
7.44am GMT
07:44
European Commission spokeswoman Mina Andreeva has confirmed that Greece got its menu of reforms in before the midnight deadline.
List of reform measures of #Greek government received on time. @JunckerEU @EU_Commission
7.30am GMT
07:30
Greece's reform plan has arrived!
Good morning, and welcome to our rolling coverage of the Greek bailout negotiations and other key events across the world economy, the financial markets and business.
We start with some breaking news... Greece has taken a big step towards finalising its four-month bailout extension by submitting its list of planned economic reforms to Brussels.
After yesterday’s drafting and redrafting, the Athens government has sent a final list of measures to its creditors.
European Commission president Jean-Claude Juncker’s spokesman, Margaritis Schinas, has just tweeted that the list reached Brussels before the deadline of midnight Monday/Tuesday.
List of reform measures of Greek government received on time.
It will now be assessed by eurozone finance ministers on a conference call this afternoon.
If they approve it, then Greece’s immediate funding needs should be covered until early summer. If they don’t, then last Friday’s deal will come under immediate strain.
As we covered yesterday, the proposal is expected to outline plans to raise billions of euros by tackling tax evasion, corruption, and smuggling.
It may also provide new protection for taxpayers who face fines for unpaid tax, home owners who risk defaulting on their mortgages, and support for the poorest.
Prime minister Alexex Tsipras’s government is trying to tread a tricky line, between satisfying the demands of the eurozone and meeting his pre-election pledges.
The big question, though, is whether today’s proposals are detailed enough to satisfy finance ministers.
Eurogroup chief Jeroen Dijsselbloem may give an early clue, when he appears before the European Parliament’s Economic and Monetary Affairs committee from 9am GMT (10am local time).
In other news, three of the world’s most powerful central bankers will be appearing today.
The Holy "Troika" due to speak today - #BoE's Carney, #ECB's Draghi and #Fed Chair Yellen
We’ll be tracking all the main events through the day as usual...
