Greek Primary-Surplus Proposal in Line With Demands, EU Says

Primary-surplus targets set out in Greece’s latest set of proposals conform to creditors’ demands even as other disagreements persist, according to Valdis Dombrovskis, European Commission vice president for euro policy.

“It’s in line with the institutions’ proposals, meaning surpluses in the next four years is 1, 2, 3, 3.5 percent of GDP respectively,” Dombrovskis said in a Bloomberg interview in Brussels.

While it’s “positive” that Greece late last night sent a concrete set of proposals on how it was going to revamp its economy -- a move needed to convince creditors to unlock aid and avoid a default -- there is still work to be done, Dombrovskis said.

Proposals on pension reform, the value-added tax as well as other issues have yet to be assessed, he said. “On some of the elements we still believe that there are better solutions possible,” he said.

While the Greek authorities sent the list of measures too late for a full appraisal by a meeting of euro-area finance chiefs in Brussels on Monday afternoon, they didn’t reject the proposals out of hand unlike with prior pledges. Officials said it could form a basis for a deal and EU Commission President Jean-Claude Juncker said he thought that could happen this week.

Bailout Extension

If there’s an agreement in sight, the finance ministers will probably extend Greece’s loan arrangement, the European portion of which is due to expire on June 30, to help ensure the debt-stricken country meets its repayments, Dombrovskis said.

“There are ways to ensure that Greece can meet its liquidity problems this month but, for example, as regards disbursements from the European Financial Stability Fund, the EFSF, it’s likely that there will be need for an extension of the program to allow for those disbursements,” Dombrovskis said.

Attention shifted to an emergency summit of leaders from the 19 euro countries on Monday evening where Greek Prime Minister Alexis Tsipras was scheduled to explain his latest set of proposals. That will be followed by a second, scheduled summit, beginning Thursday, and a possible additional meeting of euro-area finance ministers.

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