Prime Minister Alexis Tsipras has decided that an intermediate deal will not benefit Greece at the moment and is now changing course in negotiations aiming at a final deal that would secure financial support for 2015 and 2016.
According to government sources, the prime minister believes that Greece does not need an intermediate deal with lenders that would require reforms. It needs to use some financing tools, such as a raise on the cap of Treasury-bills in order to increase liquidity, and go for a final agreement in June. This way, thorny issues such as labor and security fund reforms will be postponed for the end of May.
Government officials say that negotiations will take place in two stages. The first will start on Thursday, after the end of negotiations with the lenders’ representatives (the so-called Brussels Group) on a technical level. Then Athens will ask for a Euro Working Group session on Friday and possibly an emergency Eurogroup, even via teleconference. The first target will be an easing on the acceptance of Greek T-bills by the European Central Bank.
The second stage will be an intensification of negotiations so that a final agreement will be reached by the end of May. Meanwhile, Tsipras will have a series of telephone conversations with top European officials from the European Commission and the ECB and International Monetary Fund officials. The Greek prime minister is trying to reach a deal on a political level, despite the pressure from lenders to reach an agreement on a technical level.
In order to appease lenders, Tsipras is willing to make certain concessions. Specifically, the single property tax (ENFIA) will probably remain for 2015, there might be a single value added tax for all goods and services, cuts in additional pensions and implementation of various luxury taxes.
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