Greece readies reform plans to first sign of leftist unrest

 Greece will present its economic reform plans on Monday to seal a euro zone financial lifeline, but the government drew criticism from a veteran leftist and ruling party member that the deal let voters down.

Germany, the biggest contributor to Greece's two bailouts totalling 240 billion euro, said any extra spending on Athens' list of reforms had to be offset by savings or higher taxes.

After a climbdown in Brussels to win the conditional four-month agreement, the government of Prime Minister Alexis Tsipras declared the reform list would at least be decided by Greeks, in contrast to the austerity policies dictated by foreign creditors since they bailed out Athens in 2010.

"The list will include a series of reforms that the Greek government will propose – and I underline that," said government spokesman Gabriel Sakellaridis. "Above all, they will be socially just reforms that aim to fight tax evasion, to fight corruption," he told Skai television.

Saying the list would go to Brussels before the end of Monday, Sakellaridis made clear Athens was anxious to avoid any last-minute hitches in securing the funding needed to keep Greece afloat and avoid an exit from the euro zone.

"We aim for this list to be accepted by the partners. This is why there are consultations and discussions with the partners so that there is a mutually beneficial solution," he said.

Tsipras has declared victory in Friday's deal, which is conditional on Greece's European and IMF creditors accepting the reform list, even though he had to accept an extension of the bailout programme he had promised to scrap.

But he drew withering criticism from veteran leftist Manolis Glezos, a Syriza member of the European Parliament who attacked the failure to fulfil Syriza's campaign promises and said simply changing the deal's previously inflammatory wording would not soothe the public.

The deal renamed the "troika" – despised inspectors from the European Commission, European Central Bank and International Monetary Fund who monitored Greek compliance with bailout commitments.

"Renaming the troika as 'institutions', the bailout as an 'agreement' and creditors as 'partners' … does not change the previous situation," he wrote in a weekend blog.

"I apologise to the Greek people because I took part in this illusion," he said. "Let's react before it is too late."


The measures, which the Eurogroup of euro zone finance ministers will consider in a teleconference, aim to raise revenue in ways favoured by Tsipras's leftist Syriza party, such as taxing the rich as well as tackling tax evasion and graft.

Following a series of testy Eurogroup meetings, the international creditors will scrutinise the reforms to ensure they comply with another of Greece's concessions – that nothing it does during the four months burdens the state budget.

"The ball is in the Greek government’s court," said German Foreign Minister Frank-Walter Steinmeier. "If Athens wants to see changes in individual points, then that is okay. But if these changes lead to further spending, then they need to save elsewhere or look to gather more revenue."

Steinmeier noted the Eurogroup deal extended the bailout programme that had been due to expire on Feb. 28 only until the early summer. "Europe has a chance to pause for breath – that’s all – this is not a solution," he told Bild newspaper.

Bild also quoted Greek sources as saying the planned reforms would bring in more than seven billion euros, money Athens hopes to use for easing the plight of Greeks worst hit by the austerity policies of job and pension cuts.

It aims to raise 1.5 billion euros by fighting gasoline smuggling. Taxation of rich Greeks and oligarchs is expected to bring in 2.5 billion, while enforcing regular taxation and recouping tax arrears should also raise 2.5 billion euros. Most of the rest would come from tackling cigarette smuggling.

With Greece unable to fund itself commercially, the opposition and fellow euro zone member Ireland say Tsipras will have to negotiate a third bailout when the extension expires.


The Brussels deal opens the possibility of lowering a target for the Greek primary budget surplus, which excludes debt repayments, freeing up some funds to help ease the effects of a long depression which has pushed unemployment to 25 percent.

But otherwise, Athens gained little.

The criticisms by Glezos so far stand alone: there have been no other signs of open dissent within Tsipras's party which continues to enjoy strong support from the broader public.

That's good news for Tsipras, who now has to sell the Brussels deal and an eventual long-term agreement with the euro zone not only to voters but to Syriza's left wing and his junior coalition partner, the right-wing Independent Greeks

However, while not a party heavyweight, Glezos does command moral authority. As a young man under the World War Two occupation, he scaled the Acropolis under the noses of German guards to rip down a Nazi flag and hoist the Greek flag, making him a national hero.

His decision to break ranks drew an abrupt response from the government.

"Manolis Glezos is someone whom we will never cease to honour," said Sakellaridis. "But … I believe that yesterday's statement in particular was misguided and wrong."


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