Demonstrators backing a “yes” vote in Sunday’s referendum in front of the Greek parliament
It may have come a few days too late, but Alexis Tsipras, the Greek prime minister, appears to have conceded on a whole raft of outstanding differences between his government and its international bailout creditors. According to a letter sent late Tuesday night to the heads of the country’s trio of bailout monitors, which we got our hands on and have posted here, Tsipras concedes to most of the economic reform proposals published by the European Commission on Sunday, with a few significant exceptions that could still trip up any deal.
On one of the most contentious issues, overhauling the country’s value-added tax system, Tsipras still wants a special exemption for Greek islands, some of which are in remote areas and have difficulty accessing basic daily needs. Keeping the islands’ exemption in place has been one of the main demands of Tsipras’ junior coalition partners, the right-wing Independent Greeks party. But creditors, whose main goal is simplifying one of the EU’s most exemption-ridden VAT schemes, have balked, saying it requires an entirely separate administration to keep the islands on a different, reduced rate.
On the toughest of all issues between the two sides, pension reform, Tsipras is demanding even more concessions, which come after the creditors have already moved quite a bit in Athens’ direction. The most politically charged dispute has been over a so-called “solidarity grant” awarded poorer pensioners. Creditors have requested it be phased out by the end of 2019 – which in itself is a major concession on their part. Originally, they were shooting for 2017.
Tsipras now agrees to the 2019 date, but requests that the phasing out of the grant go a little slower. Creditors have wanted the top 20 per cent of those receiving the grant – known by its Greek acronym EKAS – to lose the benefit immediately. Tsipras argues for a more gradual process. The new letter also requests to implement a 2012 pension reform in October, rather than immediately, as creditors want.
The other issues have been less contentious, and Tsipras even agrees to one of the most symbolically important: cutting defence spending by €400m, rather than the €200m he had originally proposed. Under the new Greek proposal, that would start in 2017, rather than this year, as creditors wanted. Eurozone finance ministers are due to discuss the new letter in a conference call at 5:30pm Wednesday evening.