Greece submits 11th hour reform plan; Eurozone grants 4-month extension

(Photo credit: Abode of Chaos via Flickr / Creative Commons)

Global creditors granted Greece a reprieve after the government submitted a list of reforms in exchange for a four-month extension to its bailout. This, despite campaign promises the newly elected leftist Syriza government made promising to stand up to imposed austerity measures that critics say have hobbled the economy and slashed standards of living. FSRN’s Jacob Resneck reports.

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At the eleventh hour Greece’s government delivered a list of structural reforms to its economy last night. Examples include assurances that increased state spending on domestic humanitarian needs won’t put the budget in the red and minimum wage hikes would be phased in gradually, according to a copy of the document seen by Reuters.

European financial leaders accepted the proposal, preventing the nation from going broke as it wrangles with creditors that provided a multi-billion dollar bailout in 2010.

The new Syriza-led government argues most of that money went to European banks and the payments have crippled Greece’s economy leaving more than a quarter of the country unemployed. Europe’s largest states – especially Germany – argue Greece has no room to negotiate, though Greece has threatened to exit the common currency if there’s no compromise.

Eurogroup President Jeroen Dijsselbloem was cautious after reviewing Greece’s proposed reforms today.

“This list is just an indication of the kind of reforms that they would like to push, like to replace and also the ones that they would like to continue,” the Dutch finance minister said Tuesday. “And it is going to take time to really get into the details and to design a new contract or agreement which will carry us on for four months.”

The International Monetary Fund questions whether the proposal goes far enough and the deal still needs ratification from several parliaments in European member states.

Back in Greece, the Syriza government is in damage control mode arguing that is hasn’t compromised on its key election promise to end austerity. A Greek government statement says it is still committed to providing food, shelter, health services and basic energy to those in need.

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