Wednesday, February 25, 2015

In a letter to Jeroen Dijsselbloem, president of the eurozone finance ministers’ group, obtained by Reuters, Greece’s finance minister, Yanis Varoufakis, conceded that the Greek authorities would “refrain from unilateral action that would undermine the fiscal targets, economic recovery and financial stability”.  Crucially, he said Greece would remain under the supervision of the European commission, the European Central Bank and International Monetary Fund – the unpopular troika that the Syriza-led government had insisted it would throw off.  Germany says Greek proposals for a six-month extension to its bailout programme do not go far enough .   Eurozone officials are meeting in Brussels on Thursday to assess the latest Greek proposal. Raoul Ruparel, the head of economic research at Open Europe, thinks the Greek government has little chance of getting the rest of the eurozone to back its plans on labour market reforms, pensions or privatisation.   However, in a briefing paper, he wrotethat the eurozone could give way on another one of Greece’s key demands, to allow the government to run a smaller budget surplus, so freeing up money for social spending. “The Greek election represented a tipping point, meaning that the rest of the eurozone will have to consider some tradeoffs,” he wrote.  A spokesperson for the European commission president, Jean-Claude Juncker, said the letter was a positive sign that could pave the way for a reasonable compromise....

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