Greece to present reforms for legislation to lenders

By Renee Maltezou and Angeliki Koutantou
Greek Prime Minister Alexis Tsipras in Athens April 21, 2015. REUTERS/Alkis Konstantinidis

By Renee Maltezou and Angeliki Koutantou

ATHENS (Reuters) - Euro zone officials will discuss Greece on Wednesday after Athens said it would present a list of reforms for legislation to show it is serious about acting on pledges to secure aid.

The reform list is not expected to offer major new concessions beyond those already discussed with EU and IMF lenders, but Athens is hoping it will speed up slow-moving talks and allow for at least an initial deal to ease its cash crunch.

The reforms will first be discussed at a meeting of euro zone finance ministry officials at 1330 London time on Wednesday. They will then be assessed at a broader meeting of technical-level teams from Greece and the lenders in Brussels on Thursday, Greek government officials said.

Despite the scepticism of lenders, Greece's government is hoping an "interim" deal can be struck before a May 12 payment of 750 million euros (£537.3 million) to the IMF that Greek officials have suggested could be difficult to pull off without more aid.

The lenders have said a partial disbursement of a pending aid tranche is not possible until Greece has presented a full list of reforms but the government is hoping an initial deal will prompt the European Central Bank to loosen restrictions that prevent Greek banks from buying more Treasury bills.

"We are now aiming at a 'minimum', let's say, agreement in which we combine some things that we will agree to implement immediately with the relaxation of the ECB restrictions," Deputy Prime Minister Yannis Dragasakis told Sto Kokkino radio.

"We have two options. There is the negative scenario, not reaching a deal... which we don't want, we are fighting to reach a deal. On the other hand, Europe also has a dilemma and an option. They must also decide."

The ECB, which has kept Greek banks on a tight leash while talks with lenders continue, raised the cap on emergency liquidity assistance available for Greek banks by 1.4 billion euros to 76.9 billion euros, a banking source told Reuters on Wednesday.

But Greece is hoping the ECB will also lift the ceiling on the amount of T-bills the Greek state can issue to finance its needs and on the amount of T-bills Greek banks can submit as collateral in exchange for funds if it makes progress in talks with lenders.

The discussion with lenders on concrete proposals for legislation is meant to underline the government's intent, after the lenders accused Prime Minister Alexis Tsipras's government of dragging its feet and failing to produce results.

The proposals will include tax and public administration reforms, a tax on television broadcasting rights and TV advertisements, an official said. Tourists on popular Greek islands will be required to use a credit card for transactions of more that 70 euros in an effort to crack down on tax evasion.

Talks with lenders have been held up on disagreement about major issues like pension and labour reform as well as a proposed value-added tax hike on Greek tourist islands, and it was not immediately clear if the government planned to cede more ground on those issues during talks with lenders this week.

One official said the government would try to move forward on the labour deadlock by pushing back its plan to raise the minimum wage, a move the lenders oppose.

However, Greece's deputy labour minister reiterated the government would not agree to demands for further pension cuts.

"Our government is making every possible effort right now to have a positive deal, which will respect our programme, which will respect the main principle of our programme since we took power, which is to put a brake on wage and pension cuts," Deputy Labour Minister Dimitris Stratoulis told Mega TV.

The draft bill is expected to be debated at a cabinet meeting in Athens on Thursday, a finance ministry official said. Once approved, it would then go on to be debated in parliament.

(Additional reporting by Lefteris Papadimas, Writing by Deepa Babington; editing by Anna Willard)