Greece’s provisional agreement with creditors to avert a default started to crack as European officials said the country’s latest proposals fell far short of what was tabled two weeks ago and Greek ministers floated the prospect of a referendum if their reforms are rejected.
The list of measures Greece’s government sent to euro region finance ministers last Friday, including the idea of hiring non-professional tax collectors such as tourists, is “far” from complete and the country probably won’t receive an aid disbursement this month, Eurogroup Chairman Jeroen Dijsselbloem said on Sunday.
Euro-area finance ministers meet today in Brussels and will probably withhold further aid payments to Greece. European Commission Vice President Valdis Dombrovskis said he doesn’t expect the Eurogroup to make any decisions as reform proposals must first be approved by the Greek parliament and then implemented before the next bailout disbursement is made.
Dutch Finance Minister Jeroen Dijsselbloem said Greek reform plans are “far from” complete. No disbursements are seen in March, Dijsselbloem, who also chairs the meetings of the currency bloc’s finance ministers, said at an event organized by de Volkskrant in Amsterdam.
Greece’s anti-austerity government, elected in January on a promise to renegotiate the terms of a 240-billion euro ($260 billion) bailout, has to present detailed proposals to European creditors or risk running out of cash as soon as this month. The renewed tensions threaten to temper a rally in Greek bonds sparked by optimism over the provisional accord.