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| Eurozone Approves Greece Bailout Overhaul Plan | Eurozone Approves Greece Bailout Overhaul Plan |
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| BRUSSELS — Eurozone finance ministers on Tuesday approved Greek proposals aimed at easing the hardships created by a huge international bailout, extending that program by four more months. | BRUSSELS — Eurozone finance ministers on Tuesday approved Greek proposals aimed at easing the hardships created by a huge international bailout, extending that program by four more months. |
| The decision by the finance ministers means “national procedures for extension of the Greek programme can begin,” Valdis Dombrovskis, a vice president at the European Commission, wrote on his Twitter account. | The decision by the finance ministers means “national procedures for extension of the Greek programme can begin,” Valdis Dombrovskis, a vice president at the European Commission, wrote on his Twitter account. |
| The reworking of the bailout program by the new Greek government included pledges to take a disciplined approach to budgets, spending and tax collection, while remaining committed to easing the “humanitarian crisis” caused by years of economic hardship and high unemployment. | The reworking of the bailout program by the new Greek government included pledges to take a disciplined approach to budgets, spending and tax collection, while remaining committed to easing the “humanitarian crisis” caused by years of economic hardship and high unemployment. |
| In trying to achieve that delicate balance — to meet the demands of its European creditors in order to keep the loan money flowing, but without reneging on the anti-austerity campaign promises on which it was elected — the government of Prime Minister Alexis Tsipras may find a difficult road ahead, even with the backing of the eurozone finance ministers. | In trying to achieve that delicate balance — to meet the demands of its European creditors in order to keep the loan money flowing, but without reneging on the anti-austerity campaign promises on which it was elected — the government of Prime Minister Alexis Tsipras may find a difficult road ahead, even with the backing of the eurozone finance ministers. |
| The extension is expected to require the approval of lawmakers in Greece, Austria, Estonia, Finland, Germany, Netherlands and Slovakia before a Saturday deadline, when the European portion of the bailout is set to expire. | The extension is expected to require the approval of lawmakers in Greece, Austria, Estonia, Finland, Germany, Netherlands and Slovakia before a Saturday deadline, when the European portion of the bailout is set to expire. |
| In a statement, the so-called Eurogroup of finance ministers from the 19 countries that use the euro said they approved the Greek proposals in an afternoon conference call, after having consulted with Greece’s other major lenders, the International Monetary Fund and the European Central Bank. | In a statement, the so-called Eurogroup of finance ministers from the 19 countries that use the euro said they approved the Greek proposals in an afternoon conference call, after having consulted with Greece’s other major lenders, the International Monetary Fund and the European Central Bank. |
| “The institutions provided us with their first view that they consider this list of measures to be sufficiently comprehensive to be a valid starting point,” the Eurogroup wrote. | “The institutions provided us with their first view that they consider this list of measures to be sufficiently comprehensive to be a valid starting point,” the Eurogroup wrote. |
| Mario Draghi, the president of the European Central Bank, said the Greek measures were a “valid starting point” and suggested that he might be open to changes in the conditions imposed by Greece’s creditors. | |
| But he said that Athens needed to provide more details about what it had in mind, and that any existing conditions the Greeks did not like would have to be replaced “with measures of equal or better quality.” | |
| The International Monetary Fund also gave the Greek proposals a lukewarm reception. Christine Lagarde, managing director of the I.M.F., welcomed commitments by Athens to fight tax evasion and corruption. But she warned that the Greek measures were “generally not very specific” and suffered a lack of “clear assurances” in “perhaps the most important” areas, like pensions, value added tax, privatizations and labor market law. | |
| Greek stocks rose sharply in midafternoon trading, with the Athens index up about 10 percent and bank shares rising more than 15 percent. Interest rates on Greek 10-year bonds fell to about 8.4 percent. | |
| The Eurogroup statement formally closes a chapter in the bitter standoff between Greece and countries like Germany and Finland, where there is deep mistrust of the new anti-austerity government in Athens. That mistrust nearly derailed weeks of late-night bargaining in Brussels. | The Eurogroup statement formally closes a chapter in the bitter standoff between Greece and countries like Germany and Finland, where there is deep mistrust of the new anti-austerity government in Athens. That mistrust nearly derailed weeks of late-night bargaining in Brussels. |
| But the statement was also a sign that lenders would continue to closely scrutinize Greece’s finances and that they could make additional demands on Athens before disbursing a loan of €7.2 billion, or about $8.2 billion — money the Greek government needs to meet its debt obligations. Under bailouts in 2010 and 2012, Greece has been granted €240 billion in exchange for pursuing various economic overhauls. | |
| “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,” the Eurogroup wrote, referring to the International Monetary Fund and the European Central Bank. | “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,” the Eurogroup wrote, referring to the International Monetary Fund and the European Central Bank. |
| Among the overhauls are plans to improve management of the national budget, and to enact changes to Greece’s taxation system, including changes to sales tax policy, “with a view to limiting exemptions while eliminating unreasonable discounts,” according to a letter that Yanis Varoufakis, the Greek finance minister, submitted to Mr. Dijsselbloem. | Among the overhauls are plans to improve management of the national budget, and to enact changes to Greece’s taxation system, including changes to sales tax policy, “with a view to limiting exemptions while eliminating unreasonable discounts,” according to a letter that Yanis Varoufakis, the Greek finance minister, submitted to Mr. Dijsselbloem. |
| The letter emphasized Greece’s commitment to curbing tax evasion, particularly among the wealthy, and said that fighting corruption was “a national priority.” | The letter emphasized Greece’s commitment to curbing tax evasion, particularly among the wealthy, and said that fighting corruption was “a national priority.” |
| The government also committed not to reverse existing privatization plans and said it would review planned sell-offs with a focus on bolstering “the state’s long-term benefits.” | The government also committed not to reverse existing privatization plans and said it would review planned sell-offs with a focus on bolstering “the state’s long-term benefits.” |
| In addition to streamlining the public sector, the government will review public spending at every level and will modernize the pension system in an effort to end “loopholes and incentives that give rise to an excessive rate of early retirements.” | In addition to streamlining the public sector, the government will review public spending at every level and will modernize the pension system in an effort to end “loopholes and incentives that give rise to an excessive rate of early retirements.” |
| The country still plans to raise the minimum wage, one of the government’s pre-election promises, but pledges to do so in a way that safeguards competitiveness, the letter said. | The country still plans to raise the minimum wage, one of the government’s pre-election promises, but pledges to do so in a way that safeguards competitiveness, the letter said. |
| Greek television reported that some members of Mr. Tsipras’s cabinet had expressed objections to certain overhauls set out in Greece’s letter to the Eurogroup. But — in a sign that the dissent was controllable, at least for the moment — no ministers made public statements criticizing the proposed changes. | Greek television reported that some members of Mr. Tsipras’s cabinet had expressed objections to certain overhauls set out in Greece’s letter to the Eurogroup. But — in a sign that the dissent was controllable, at least for the moment — no ministers made public statements criticizing the proposed changes. |
| The opportunity for Greece to submit the proposals was one of the few concrete concessions it won in an accord reached with its creditors late on Friday in Brussels. That accord brought to an end the bitter standoff that began when Mr. Tsipras pledged to redraw or scrap the bailout agreement after he came to power in January. | The opportunity for Greece to submit the proposals was one of the few concrete concessions it won in an accord reached with its creditors late on Friday in Brussels. That accord brought to an end the bitter standoff that began when Mr. Tsipras pledged to redraw or scrap the bailout agreement after he came to power in January. |
| European and Greek officials spent much of Monday exchanging drafts of the proposals to pare back austerity measures while ensuring that Greece can still meet fiscal obligations. | European and Greek officials spent much of Monday exchanging drafts of the proposals to pare back austerity measures while ensuring that Greece can still meet fiscal obligations. |
| The government of Mr. Tsipras had an opportunity to put its “political stamp” on a bailout plan if it respected budget targets, Mr. Dijsselbloem told the parliamentary committee. | The government of Mr. Tsipras had an opportunity to put its “political stamp” on a bailout plan if it respected budget targets, Mr. Dijsselbloem told the parliamentary committee. |
| The deal to extend the country’s bailout program with European creditors by four months is subject to the approval of the Greek Parliament, where some members of Mr. Tsipras’s radical-left Syriza party have called the plan a capitulation after the party’s anti-austerity campaign promises. | The deal to extend the country’s bailout program with European creditors by four months is subject to the approval of the Greek Parliament, where some members of Mr. Tsipras’s radical-left Syriza party have called the plan a capitulation after the party’s anti-austerity campaign promises. |
| Also on the list submitted by Mr. Varoufakis are plans to crack down on the smuggling of fuel and tobacco, which cost the Greek economy billions of euros a year in unrecovered tax revenue; to address tax arrears and nonperforming bank loans; and to support struggling homeowners who are unable to meet their mortgage payments. | Also on the list submitted by Mr. Varoufakis are plans to crack down on the smuggling of fuel and tobacco, which cost the Greek economy billions of euros a year in unrecovered tax revenue; to address tax arrears and nonperforming bank loans; and to support struggling homeowners who are unable to meet their mortgage payments. |
| The overhauls will also address what the new government has described as Greece’s “humanitarian crisis,” which it attributed to years of austerity, by offering measures including food stamps and free electricity for the poor, a package that Syriza has estimated would cost some €1.8 billion. | |
| The government also plans to review a pilot program seeking to guarantee a minimum income to poor families, according to criteria like the number of children in a household or the number of unemployed. The pilot was introduced in the fall by the previous administration, offering monthly payments of €250 to €500 to families, at an estimated total cost of €750 million to €1 billion. | |
| But the cost of extending the plan nationwide, as the new government aims to do, remains unclear. | |
| Athens said in the letter that the assistance measures would be mostly “nonpecuniary” and would have “no negative fiscal effect.” |