Greece makes more concessions to euro zone, Germany sets vote

Updated: 2015-02-24 20:00


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Greece makes more concessions to euro zone, Germany sets vote

Eurogroup Chairman and Dutch Finance Minister Jeroen Dijsselbloem testifies before the European Parliament's Economic and Monetary Affairs Committee in Brussels February 24, 2015. Euro zone countries are not discussing a hypothetical Greek exit from the euro zone and only non-euro member Britain has discussed it, Dijsselbloem said on Tuesday. [Photo/Agencies]

BERLIN/BRUSSELS - Greece's new leftist-led government climbed down further to euro zone creditors on its plans to halt privatisations, boost welfare and raise the minimum wage as markets rallied on the prospect of a four-month extension of its financial rescue.

A letter sent to Eurogroup chairman Jeroen Dijsselbloem late on Monday set out in broad terms the measures Athens plans to implement by July, offering assurances it will not deviate from fiscal targets or roll back past reforms.

Crucially, it pledged not to reverse any ongoing or completed privatisations, and to ensure that the fight against what the government calls the country's humanitarian crisis "has no negative fiscal effects".

The six-page document with a cover note by Finance Minister Yanis Varoufakis, seen by Reuters, contained few figures but promised to improve tax enforcement, fight corruption and "review and control spending in every area of government spending".

After experts from the European Commission, European Central Bank and International Monetary Fund give an initial view of the list, euro zone finance ministers will hold a telephone conference from 1300 GMT to finalise the four-month extension.

Greek financial markets, which reopened for the first time since Friday's outline deal between Varoufakis and euro zone finance ministers, surged on relief that the country had been pulled back from the brink of a potential banking collapse and possible state bankruptcy.

Government bond yields dropped by three percentage points and stocks hit a 2-1/2 month high due even though the country's longer-term survival inside the 19-nation single currency area remains uncertain.

Dijsselbloem, who is also Dutch finance minister, told the European Parliament the Greek reform list was just a first step and it would take time to go into detail.

"I think they are very serious (about reforms)," he said. "But it is not going to be easy. This is just a first step... It's going to take time to really get into the details and to design a new contract or agreement which will carry us on for four months."

He hinted strongly that Athens, which has had two bailouts totalling 240 billion euros since 2010, would need a further aid program when that period expires, saying: "I think we need to consider further support for Greece."

The euro zone could consider further debt relief measures if Athens met all the criteria specified in its November 2010 second bailout, "which hasn't happened yet", he said.

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