Posted June 15, 2015 Pietro Belotti
This week, Athens submitted a revised reform plan to the EU and IMF, after Tsipras rejected a set of reforms put forward by Jean-Claude Juncker.
A major point appears to be Tsipras’s demand for some debt relief. Greece with a NIIP (Net international investment position) of 122% GDP, is seeking a cash-for-reform deal, to avoid defaulting on a €1.5bn debt repayment to the IMF at the end of June. The idea that a greater flow of capital could magically heal the Hellenic economy has turned to be just an illusion, meanwhile, European Ministers will no longer accept that Greece gives an average pension equal to Germany but people retire 6 years earlier and the GDP per capita is half that of Germany, and every year the pension system receives capitals equal to 10% GDP from State while the european average is 2.5%.
Tsipras just revised his old proposal but the situation is critical and stronger changes are needed. The EU and IMF are unhappy with the extent of economic reforms the Athens government is offering and request a reform of the pension system, greater fiscal income, (preferring higher VAT rather than higher tax rates that are less sustainable), great primary surplus and lower minimum salaries.
Standard and Poor’s pushed Greece's credit rating into junk territory, warning that without a deal it could default on commercial debt within a year.
After a meeting with French and German leaders, and then with the European Commission head Jean-Claude Juncker, Tsipras said they had decided to intensify talks.