GREECE offered its eurozone creditors major concessions yesterday in a bid to extend its bailout deal by six months while its new government tries to thrash out conditions on new loans.
The government pledged not to boost its shattered economy with new public spending and said it would continue to pay its dodgy debts.
And in order to ease repayment terms on €240 billion (£175bn) of past bailout loans, Greece said it would stick to crippling financial rules that require it to run a budget surplus.
The proposal doesn’t mention Syriza’s pre-election pledge to renegotiate most of its debt — initially racked up by a series of centre-right governments with the assistance of Goldman Sachs bankers.
In addition, the government said it would let back in inspectors from the troika — the European Union, European Central Bank (ECB) and International Monetary Fund — to supervise reforms demanded by those architects of economic disaster.
However, the proposal includes no mention of continuing the austerity the eurozone has required since 2010 in exchange for the loans.
The European part of Greece’s bailout runs out on February 28 and if no deal is reached by then the ECB would likely be pushed to shut off emergency funding for Greek banks.
A spokesman for European Commission president Jean-Claude Juncker said he sees the Greek proposal as “a positive sign which could pave the way for a reasonable compromise.”
But the Germans were more pessimistic, complaining that the Greek plan did not do enough to satisfy the German government’s desire for austerity.
Finance Ministry spokesman Martin Jaeger said it was “not a substantial proposal for a solution.”
He said it amounts to a request “for bridge financing without fulfilling the demands of the (bailout) programme.”
Continuing austerity measures demanded by Greece’s creditors have destroyed its economy, with GDP now just three-quarters of what it was before the 2007 financial crisis.
One in four Greeks are out of work, including over half of young people. firstname.lastname@example.org