Brussels: Eurozone leaders at a summit in Brussels reviewed a draft proposal from their finance ministers that sets out conditions for Greece to open negotiations on a bailout.
Euro zone leaders argued on Sunday with near-bankrupt Greece at an emergency summit, demanding that Athens enact key reforms this week to restore trust before they will open talks on a financial rescue to keep it in the European currency area.
Leftist Prime Minister Alexis Tsipras was told to push legislation through Parliament to convince his 18 partners in the euro zone to release immediate funds to avert a state bankruptcy and start negotiations on a third bailout programme estimated at up to 86 billion euros.
The following is a summary of the draft proposal by their finance ministers that sets out conditions for Greece to open negotiations on a bailout.
* Greece to pass by Wednesday measures including simplifying VAT rates and applying the tax more widely, cutting back on pensions and making the national statistics agency independent.
* Greece to set clear timetable for following measures:
- ambitious pension reform;
- market reform including Sunday trading, pharmacy ownership and opening of closed professions such as ferries;
- privatise electricity transmission network;
- review collective bargaining, industrial action and collective dismissals;
- strengthen financial sector, including action on non-performing loans and eliminate political interference.
* Following actions to be taken:
- privatisation, possibly involving transfer of 50 billion euros of assets to external and independent fund;
- cut costs of public administration and reduce political influence over it. First proposal to be provided in a week.
- seek creditor approval for key legislation before submitting to public consultation or Parliament.
The above-listed commitments are minimum requirements to start the negotiations with the Greek authorities.
* Financing needs are 82-86 billion euros. Decision on new package urgently required given financing needs of 7 billion euros by July 20 and further 5 billion euros by mid-August.
* A possible new ESM programme would have to include a 10-25 billion euro buffer for banks.
* Possible debt reprofiling but no nominal haircuts.
* If no agreement is reached, Greece could be offered “time-out” from the euro area, with possible debt restructuring.
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