Have The Greek Officials Finally Gotten The Message?

Have The Greek Officials Finally Gotten The Message?

It now appears the Greek government officials have finally got serious about making a deal with its international creditors.

Monday, Greece sent the IMF and the EU creditors a proposal that promises a budget surplus in line with demands: 1% GDP this year, 2% in Y 2016 and 3% in Y 2017.

In the proposal is an offers to eliminate early retirement options, raising the sales tax and imposing higher levies on the wealthy. There is almost no gap between the 2 sides’ positions now.

The last serious Key point is a VAT (value-added tax) on catering and hotels: If Greece agrees to raise the VAT, it will satisfy demands for an extra 1% of revenue.

So, as it stands now it is likely a deal will be reached at an EU Summit Thursday.

Greek stocks and bonds have reacted positively, as if the deal has been made already.

There are some obstacles

The hardine supporters of the ruling Syriza party will oppose anything that looks like Greeks bowing to creditors. So, Prime Minister Alexis Tsipras must convince his party’s left wing to go along. And if he can do that, Greece may be able to avoid default and shift its focus away from temporary fixes to rebuilding a sustainable economy.

Stay tuned…

HeffX-LTN

Paul Ebeling

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