<nettime> Comments on the latest Greek proposals

[nettime's zuchtmeister <nettime@kein.org>]

[Less than a page long, but declarations of war tend to be short. The
third one issued by Germany in 101 years.]

10 July 2015
Comments on the latest Greek proposals

On 9 July 2015 Greece has submitted a list of proposals. These
proposals are based on and even fall behind the latest aide memoire
that was drafted by the Troika to conclude the review under EFSF.
However Greece was not able to conclude the review. These proposals
lack a number of paramount important reform areas to modernize
the country, to foster long term economic growth and sustainable
development. Among these, labour market reform, reform of public
sector, privatisations, banking sector, structural reforms are not
sufficient.

This is why these proposals can not build the basis for a completely
new, three year ESM program, as requested by Greece. We need a better,
a sustainable solution, keeping the IMF on board. There are 2 avenues
now:

1. The Greek authorities improve their proposals rapidly and
significantly, with full backing by their Parliament. The improvements
must rebuild confidence, ensure debt sustainability upfront and the
successful implementation of the program - so as to ensure regained
market access after completion of the program. Improvements include:

a) transfer of valuable Greek assets of [50 bn] Euros to an external
fund like the Institution for Growth in Luxembourg, to be privatized
over time and decrease debt; b) capacity-building and de-politizising
Greek administrative tasks under hospices of the COM for proper
implementation of the program; c) automatic spending cuts in case of
miss ing deficit targets.

In parallel, a set of financing elements would be put together to
bridge the time gap until a first disbursement under the enhanced
program could be made. This means the existing risk of not concluding
a new ESM program should rest with Greece, not with Eurozone
countries.

2. In case, debt sustainability and a credible implementation
perspective can not be ensured upfront, Greece should be offered
swift negotiations on a time-out from the Eurozone, with possible
debt restructuring, if necessary, in a Paris Club - like format over
at least the next 5 years. Only this way forward could allow for
sufficient debt restructuring, which would not be in line with the
membership in a monetary union (Art. 125 TFEU).

The time-out solution should be accompanied by supporting Greece as an
EU member and the Greek people with growth enhancing, humanitarian and
technical assistance over the next years. The time-out solution should
also be accompanied by streamlining all pillars of the Economic and
Monetary Union and concrete measures to strengthen the governance of
the Eurozone.





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