THE GREEK PROPOSAL - Crucially, in this document at least, there is no mention of the debt sustainability issue.

• Primary budget surplus targets: government has agreed to hit targets of 1pc, 2pc, 3pc, and 3.5pc from 2015-2018. This is in line with what has already been proposed, but they are still very ambitious, particularly as economic activity is set to have deteriorated even further while the country is under capital controls and the banking system is temporarily shut down.

• VAT exemptions for Greek islands will be abolished: the 30pc discounted rate will go, as demanded by creditors but previously fiercely resisted by the government. The proposals say they will start with "islands with the highest incomes and which are the most popular tourist destinations" first.

• Hotels will remain in lower 13pc bracket, but restaurants will be hit by the highest 23pc bracket. Books, medicines and the theater (don't ask me why) will remain at a super reduced 6pc rate.

• Greek farmers will also have all fuel subsidies abolished, another concession demanded by creditors in previous plans

• Importantly, the proposals note that these VAT measures will be reviewed before the end of 2016, if "additional revenues are collected through tax evasion" and other improved collection measures result in higher tax income

• Higher income tax: should any of the proposals result in "fiscal shortfalls" the government is controversially proposing hikes on income tax for the poorest earners. This would see

- incomes below €12,000 taxed at 15pc (from 11pc)

- incomes above €12,000 taxed at 35pc (from 33pc)

• Corporation tax: will be raised to 28pc, rather than 29pc first set out by Athens

• Pensions: Greeks have agreed to phase out their supplementary pensions for the poorest by Dec 2019, rather than 2020. There is no mention of replacing them, and importantly, the top 20pc beneficiaries will also not be protected from the cuts. The government has also agreed to hike the basic pensions retirement age to 67

• Interestingly, the government also seems to have agreed to nullify previous court rulings which have deemed the 40pc cut in pensions as unconstitutional and need of reverse: The authorities will adopt legislation to fully offset the fiscal effects of the implementation of court rulings on the 2012 pension reform.

• Defence spending: to be cut by €100m this year and €200m in 2016. Creditors previously demanded €400m budget cut next year.

"Riot police have clashed with anarchist groups in Athens tonight, as Greece’s PM Tsipras faces rebellion over the country’s bailout plan" So anyone who does not appreciate being fucked over by their own lying gutless back peddling government for the sake of the Troika and the thugs they represent, is automatically an Anarchist?

European Commission will use €7bn from an EU bail-out fund for Greece, as Tsipras says banks might not reopen for months

What is legal basis to use EFSM? The treaties establishing the new rescue fund ruled out the use of the previous EFSM to rescue a eurozone member. Mr Dombrovskis is asked on what the legal basis is for using the moribund fund. "Given the very difficult situation, and given the urgency, and given the way we are addressing the real concern, I think it is still possible," he says. "There are technical interpretations of this decision. There is a political problem that needs to be addressed. At the end of the day, the decision is to be made by the Council. Currently, we don't have better solutions on the table." He adds that by just helping one eurozone country, and not the bloc as a whole, the Commission can get round its own prohibition.

By: Credit Suisse

Will 2015 be the year Europe’s sluggish economy finally sputters to life? Time will tell, but the European Central Bank’s quantitative easing policy, low oil prices, and a weak euro should all help bolster economic growth in the coming months. Watch our video to see what experts such as José Manuel Barroso, former President, European Commission, and Richard Fisher, former President and CEO, Federal Reserve Bank of Dallas, had to say at the Credit Suisse 18th Annual Asian Investment Conference. - See more at: http://www.thefinancialist.com/is-the-eurozone-ready-for-healthy-growth/#sthash.1iRVoHdS.dpuf

European Councilp president Donald Tusk has said Greece's creditors should consider debt sustainability if Athens tables realistic reform proposals, something it is meant to do by midnight today.  "The realistic proposal from Greece will have to be matched by an equally realistic proposal on debt sustainability from the creditors. Only then will we have a win-win situation”, Tusk said on Thursday (9 July), after speaking with Greek leader Alexis Tsipras by phone earlier in the day.

The comment comes on top of a widely publicised report by the International Monetary Fund (IMF), one of Greece's creditors, which also said the country's debt mountain is hindering growth.  IMF chief Christine Lagarde repeated the stance on Wednesday, saying that while Greece needs structural reforms and fiscal consolidation, "the other leg is debt restructuring, which we believe is needed in the case of Greece for it to have debt sustainability”.  Debt sustainability - along with the various formats for getting there - has been a central sticking point for the Greek government, which says it cannot support its debt. Germany, Athens' biggest eurozone creditor, has already rejected an outright debt write-off as illegal under the EU treaties, amid a general hardening of euro countries' attitudes to the Tsipras government.  The hardening came after Tsipras called a snap referendum on creditors' terms, resulting in a rejection of them by Greek citizens. Since then, creditors have insisted Greece will have to commit to more reforms as the economic situation has deteriorated further, amid closed banks and capital controls, now in place for over a week.

Greece, for its part, asked for a three-year bailout on Wednesday, with the European Commission and the European Central Bank currently looking at whether it is eligible for a further (third) loan.

 

Since coming into office, the Athens government has relentlessly argued that Greek expulsion would inevitably trigger an unravelling of the monetary union, and ultimately deal a fatal blow to the European project itself.  Until recently this narrative had gained little traction, but as Grexit becomes the default scenario and media coverage more frantic, more commentators warn of a potential “Lehman moment” for the EU. They fear that Grexit would undermine public trust in the core values of the EU and turn the eurozone into a currency-peg arrangement, which will be unpicked by financial markets or populist political leaders seeking an easy way out. Even the German weekly Der Spiegel showed Merkel sitting on ancient Greek ruins, under the headline: “If the euro fails, so does Merkel’s chancellorship”.  It may be true that Grexit would be an unprecedented event in the history of European integration and raise a host of difficult legal questions. But the fears for the political sustainability of the euro are vastly overblown. In the short term Grexit would pose no existential threat to the eurozone, especially if it is done in a coordinated fashion.  Five years ago the risk of contagion from a Greek default and exit were real. Monetary union remained fragile, with a growing and high divergence in the borrowing costs between the core and periphery countries as investors fled for safety. But this time the markets’ reaction to last weekend’s referendum result has been muted, with the borrowing costs of Italy and Spain rising relatively little from low levels. The economies of Ireland, Spain and Portugal are in a much better shape as a result of structural reforms and fiscal consolidation.Moreover, the European Central Bank has become de facto lender of last resort with its OMT – outright monetary transactions – programme, flanked by new institutions and mechanisms such as the European stability mechanism and the banking union. The majority of Greek debts are held by public institutions, and the size and location of the potential losses are much clearer.

Any currency's value only reflects how it is perceived.  That credibility to state:   ''The Bank promises to pay the bearer on demand the sum of''.  Immaterial whether you call your currency a Euro, Drachma or a Turnip-Pie.  'Tis the degree of credibility that sustains its value not the name.  Greeks to be taken seriously must deliver that credibility to the markets and as such, not be viewed as mish-mash of political influences devoid of ''FOCUS''.  Can it do that .... Not easy .... But 'Yes' it can.  But it must be seen as adopting credibility as opposed to hoping something of the  Mr Micawber politics: albeit ''something will turn-up'' .... Because, one way or the other it certainly will?  Thus delivered: then it may well be the EU and the Euro that come under that FOCUS, if not already?  Greece might engage in this very activity - continuing to print Euros, while ceasing to take orders from the European Central Bank.  Nice idea excepting member state's central banks are not allowed willy nilly to churn out Euro paper currency.  Which is, of course, one of the two core flaws of the Euro mechanism. Any nation state operating a fiat monetary system has two essential levers to try and adjust their monetary economy: base rates and money supply. Excepting, of course with the Euro this is "Managed" centrally by the ECB; leaving only local taxation and sovereign borrowing for member governments, which is clearly not sufficient.  Trying to meld hugely disparate states into a One Size Fits All, monetary system simply doesn't and could not ever work: unless, of course, the successful Euro members are happy for their taxpayers to fund the cost of shipping buckets of capital to the impoverished - in relative terms - member states.  Seems now, as I forecast years back, the German taxpayers are simply no longer prepared to accept higher taxes and a reduced standard of living simply to prop up the basket cases.