19/05 -A new Juncker plan to help Greece?

According to leaks in tovima.gr, referred to in several European media and all Greek media, President Juncker has tried to bridge the gaps in negotiations between Athens and creditors with a “plan” to temporarily secure Greece’s future in the euro area. This plan, which involves excluding the IMF from the negotiations would see Greece’s primary budget surplus target reduced to 0.75% this year.

The proposals also include releasing €5bn to the government in June, and delaying several fiscal austerity measures until October. However, Greece will have to retain a controversial property tax and push for flexible labour market reforms to secure an extension of its bail-out programme. Most media nevertheless note that Athens and Brussels officially deny the information.

Efimerida ton Syntakton comments that the Commission’s supposed proposal is “too good to be true”. L’Opinion‘s Romaric Godin writes that if the document turns out to be authentic, it goes to show the growing nervousness among creditors and fear of the consequences of a Greek default. Some European media report that the Greek government and its creditors have sped up the negotiations and seem to be getting closer to reaching an agreement.

L’Opinion and Cyprus media refer to Commissioner Moscovici as saying that talks are now in a “decisive phase” and stating that an agreement may be reached in the near future. Greek media add that he reiterated that Greece should remain in the euro area, warning however that time is running out. The Commission’s spokesperson Margaritis Schinas, quoted in Romanian media, stated that “Constructive contacts are ongoing and progress is being made, even though still at a slow pace.”

Nevertheless, according to FAZ, the IMF is opposed to concluding the talks in a hurried manner. Naftemporiki and The Guardian write that during his speech at the annual general assembly of the Federation of Hellenic Enterprises (SEV), Greek PM Alexis Tsipras said that the government is willing to make compromises to reach an agreement. “We have previously shown that we can repay our obligations,”

Greek government spokesman Gabriel Sakellaridis said yesterday, quoted in Tageblatt. “We need a deal immediately (…) to solve these critical liquidity problems,” he added. But although the spokesman said that Athens hopes for an agreement to be reached by Friday, 22 May, during the Eastern Partnership Summit in Riga, Le Monde writes that a Greek referendum on economic reforms is not impossible.