Courtesy of Mish.
We now have “THE Final Offer Before Grexit” (I think). Of course, more offers will come after Grexit.
The Financial Times has the Four-Page Text of the Eurozone Demands on Greece.
The document is not in a form that can easily be copied. There is a line break of some sort after every character, that even my line break removal tool does not fix.
I retyped most of the document, sometimes shortening sentences or paragraphs, the essential ideas below.
Greece has Three Days to “Rebuild Trust” and Do the Following
- Streamline VAT and broaden tax base to increase revenue.
- Upfront comprehensive pension reform
- Adopt Civil Procedure Code with major overhaul of civil justice system
- Safeguard full legal independence of ELSTAT
- Fully implement Treaty on Stability, make Fiscal Council operational before finalizing Memorandum of Understanding (MoU)
- Introduce quasi-automatic spending cuts in case of deviation from targets after seeking advice from Fiscal Council and subject to the approval of the institutions
- Transpose the BRRD within a week with support from European Commission
MoU Highlights
- Carry out ambitious reforms to fully compensate for the fiscal impact of the Constitutional Court ruling on 2012 pension clause
- Implement a zero deficit clause or mutually agreeable measures by October 2015
- Adopt more ambitious market reforms with a clear timetable for implementation of all OECD toolkit recommendations including Sunday trade, sales periods, pharmacy ownership, milk, bakeries, ferries, etc., etc.
- Privatize electricity network
- Undertake rigorous reviews of collective bargaining, industrial action, and collective dismissals
- Modernize framework for collective dismissals
- Strengthen financial sector including decisive action on non-performing loans
- Eliminate political interference in appointment process and governance of HFSF
On Top of That (Mish note: those were the exact words)
- Develop a significantly scaled up privatization program with improve governance
- Invite an independent body to assess price of assets sold with involvement of the Commission OR transfer 50 billion to an existing external and independent fund like the Institution for Growth in Luxembourg to be privatized over time to reduce debt.
- Modernize and significantly strengthen Greek administration and put in place a program under the auspices of the European Commission, a capacity-building and de-politicization of the Greek administration. The first proposal needs to be provided by July 20.
- To fully normalize working methods with the institutions, the government needs to consult and agree with the institutions on all draft legislation before submitting to parliament or the public. The Eurogroup stresses implementation is the key and welcomes Greek authorities to request by July 20 support for technical assistance.
- Amend or compensate for “roll-back” legislation adopted during 2015 that is counter to the framework of the February 20, 2015 Eurogroup statement.
Minimum Requirements
The above-listed commitments are minimum requirements to start the negotiations with the Greek authorities. However, the Eurogroup made it clear that the start of negotiations does not preclude any final possible agreement on a new ESM programme, which will have to be based on a decision on the whole package (including financing needs, debt sustainability and possible bridge financing).
Mish comment: the above sentence was retyped exactly as written….
