Greece delays sending vital reforms list needed for 4-month extension of bailout

ATHENS (AFP) - Greece's new anti-austerity government late Monday said it would miss a midnight (2300 GMT) deadline to provide a list of reforms to its international lenders aimed at obtaining a four-month extension of its bailout.

But a Greek government source insisted that Brussels would get the proposals on Tuesday morning, in time for eurozone finance ministers to discuss them in a conference call in the afternoon.

"The list of reforms will be sent tomorrow (Tuesday) morning to the finance ministers of the Eurogroup," the source said. On Friday Greece had agreed to send the proposals by Monday night.

A source in Brussels said however that the conference call would only take place if the "troika" of the European Commission, the European Central Bank and the International Monetary Fund deem the reforms to be sufficient.

Time is of the essence and the stakes are high, with Greece's current 240-billion-euro (S$370-billion) bailout programme due to expire on Saturday and several European parliaments needing to approve any extension.

If Athens fails to win more time and the bailout expires, Prime Minister Alexis Tspiras's government risks running out of money, which could mean a run on banks and even possible ejection from the 19-country eurozone.

The Greek government source said that the much-awaited list of measures would include all the promises made by Tsipras's hard-left Syriza party before its sweeping election victory in January.

These include free electricity for 300,000 poor families, free access to health care, food and public transport coupons and aid for those on low pensions. The source did not say how much extra these measures will cost.

Other measures include a more "just" taxation system, measures to tackle tax evasion and corruption and to crack down on smuggling, as well as streamlining the civil service to reduce bureaucracy.

Tsipras, whose Syriza party swept to power last month, will face a voter backlash if he fails to deliver on promises made before his election victory to reverse hated austerity measures.

However other eurozone members, not least powerhouse Germany, are concerned that Athens might backtrack on promises to cut spending and pass root-and-branch reforms made in return for its two bailout packages.

Any slippage might prompt other eurozone countries like Spain, Portugal, France and Italy to go easy on the tough austerity measures that Berlin sees as vital to preventing a return of the eurozone debt crisis.

"The fundamentals - namely assistance in exchange for reform - must remain the same," German Foreign Minister Frank-Walter Steinmeier told the Bild daily in comments published on Monday.

In Berlin, a finance ministry spokesman said the list needed to be "coherent and plausible".

"Of course there will be measures that fit with the philosophy of Syriza... but they also have to take account of budgetary balance and the need to repay debts," EU Economic Affairs Commissioner Pierre Moscovici told France 2.

Tsipras has vowed to end the "humiliation" and "vicious circle" of spending cuts demanded by Greece's creditors.

He wants to use the next four months to draw up a new reform package that puts the country - where unemployment stands at 25 per cent - on a fairer road to recovery after years of recession, spending cuts and state job losses.

But the firm and united negotiating stance of Germany and other eurozone countries has obliged the former motorbike-riding communist activist and his tieless Finance Minister Yanis Varoufakis to give ground.

Athens pledged on Friday to refrain from one-sided measures that could compromise fiscal targets and had to abandon plans to tap some 11 billion euros in leftover European bank support funds.

UniCredit economist Erik Nielsen called it a "complete political surrender to the world of reality".

Tsipras insisted at the weekend that his coalition government had achieved an "important negotiating success" which "cancels out austerity". Athens says that it, not the country's creditors, is now calling the shots.

But cracks were already beginning to show, with Manolis Glezos, a 92-year-old wartime resistance hero and one of Syriza's most respected members, distancing himself from Tsipras.

"The chance of policy mistakes, political volatility and implementation risks remains quite high, and may rise," said Daniele Antonucci, economist at Morgan Stanley.

Experts at IHS Global Insight said they now expect Greece to re-enter recession in the current quarter, just a year after returning to growth.

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