Euro zone leaders at a summit in Brussels were reviewing a draft proposal from their finance ministers that sets out conditions for Greece to open negotiations on a bailout.
The following is a summary of the paper, seen by Reuters.
* Greece to pass by Wednesday measures including simplifying VAT rates and applying the tax more widely, cutting back on pensions and making the national statistics agency independent.
* Greece to set clear timetable for following measures:
- ambitious pension reform;
- market reform including Sunday trading, pharmacy ownership and opening of closed professions such as ferries;
- privatize electricity transmission network;
- review collective bargaining, industrial action and collective dismissals;
- strengthen financial sector, including action on non-performing loans and eliminate political interference.
* Following actions to be taken:
- privatization, possibly involving transfer of 50 billion euros of assets to external and independent fund;
- cut costs of public administration and reduce political influence over it. First proposal to be provided in a week.
- seek creditor approval for key legislation before submitting to public consultation or parliament.
The above-listed commitments are minimum requirements to start the negotiations with the Greek authorities.
* Financing needs are 82-86 billion euros. Decision on new package urgently required given financing needs of 7 billion euros by July 20 and further 5 billion euros by mid-August.
* A possible new ESM program would have to include a 10-25 billion euro buffer for banks.
* Possible debt reprofiling but no nominal haircuts.
* If no agreement is reached, Greece could be offered “time-out” from the euro area, with possible debt restructuring.