Greece submits new economic reforms, but no breakthrough yet - as it happened
Athens has warned its creditors that the viability of the EU is at stake, as it submits a new economic programme in an attempt to get financial aid before it runs out of cash
- Closing summary
- Greece: Europe must help us, fast
- Here's Greece's reform plan (via the FT)
- The key charts
Earlier:
7.54pm BST
It's late in London, and inching towards bedtime in Greece, so here's a quick recap.
Greece has submitted its most comprehensive reform plan yet to its creditors, but has yet to unlock any bailout funds.
7.38pm BST
Some late breaking news....the European Central Bank has agreed to raise the emergency liquidity on offer to Greek banks by another a700m.
That's quite a small increase, suggesting the ECB is keeping the pressure on Greece to reach a deal.
ECB increased ELA limit for Greek banks by a700 mln to a71.8 bln. #Greece #economy #ECB #ELA #banking #markets
7.33pm BST
Greece's government has also proposed setting up a 'bad bank' to handle the bad loans that are clogging up its financial system.
It warns that there are "Critical Deficiencies" in the banking sector today, in today's 26-page list of reforms:
The Greek banking sector has been marred by clientelism, by too close a link with the mass media and the political systems (through the provision of loans on non banking principles) and, lastly, by lending practices that were either too tight or too loose. The economic crisis has in addition created a vast amount of NPLs [non-performing loans] that impedes credit creation.
Broad and deep structural reforms aimed at ensuring financial stability, appropriate credit expansion and governance that constitutes a significant departure from suspect practices of the recent and not too recent past. The Greek government has planned a broad reform programme in order to address critical deficiencies of the banking sector, through the establishment of strong institutions and the introduction of solid processes for the functional supervision of the banks that ensure financial stability, a robust banking sector and banks that are run on sound 8 commercial banking principles.
Dealing with the very high levels of NPLs is a top priority for consolidating the banks and restarting the economy. The government wishes to explore the possibility, in conjunction with the institutions, of a capital asset management company to be created towards dealing with NPLs utilizing the remaining buffer of the HFSF.
7.20pm BST
Greece's government is proposing to raise the minimum wage...however, it also predicts that the fiscal impact in 2015 and 2016 will be "negligible"
The reforms plan states:
Proposed reforms will be introduced in stages: unifying the minimum wages of "white" and "blue collar" workers, abolishing wage differentiation based on age, and gradually increasing the minimum wage after consultations with the social partners.
7.18pm BST
The section on Greek privatizations begins with a pop at the failure of the past:
The initial goal for revenues from privatizations was a50 billion between 2011 and 2016, with a a5 billion target for 2011, a10 billion for 2012 and a5 billion for 2013. In practice, proceeds from privatizations amounted to a1.6 billion in 2011, no revenues in 2012 and a1 billion in 2013. Seldom has a privatization program failed so spectacularly!
7.12pm BST
Greece's list of economic reforms contains some firm pledges to crack down on tax evasion.
The first item is called "Intensification of audits on lists of bank transfers and offshore entities", and is said to raise a725-a875 million in 2015. a1 billion from 2016 onwards.
6.39pm BST
Agence France-Presse have also heard that eurozone finance chiefs aren't likely to told another meeting about Greece soon.
This suggests that Greece's reform plan, although more comprehensive than before, hasn't persuaded creditors to release bailout funds:
[Today's conference call] was just to take stock. There won't be any developments in coming days," a source close to the discussions told AFP.
"We will continue with technical work in Athens. There is no Eurogroup meeting in sight."
Greece: still no deal after eurozone teleconf, no Eurogroup meeting in sight, sources tell AFP http://t.co/3C4XI1mI52
6.18pm BST
Over in Athens officials are denying that today's teleconference with with the euro working group went badly.
But they are also saying April is likely to be a month packed with negotiations ... suggesting that a reform-for-cash deal is unlikely to be found at least until the next scheduled euro group of euro area finance ministers on April 24.
"There is a growing sense of convergence even if the talks are difficult."
6.14pm BST
Greece's government has also argued that its reform programme could deliver a chunky primary surplus.
Open Europe flags up the details:
Greek reform list says impact of reform programme could lead to 2015 primary surplus of up to 3.9% of GDP. #Greece pic.twitter.com/cW1NcABSq9
6.12pm BST
So, how much progress was made on today's eurozone conference call?
One eurozone official has told Reuters that there is been "progress and convergence", but there is still "quite some work that needs to be done" to reach a successful conclusion.
6.08pm BST
Greece has also warned that growth in 2015 and 2016 will be weaker than previously expected, confirming that its economy has deteriorated in recent months.
The Ministry of Finance now only expects growth of 1.4% this year, down from 2.9% estimated in the 2015 budget, rising to 2.9% in 2016 (down from 3.7%).
5.55pm BST
Greece has also warned its creditors that the "viability" of the EU, and the single currency, is at stake.
The introduction of the 26-page list of reforms presented today states that:
The Hellenic Republic considers itself to be a proud and indefeasible member of the European Union and an irrevocable member of the Eurozone. Yet the viability of that Union, and especially of the common currency, is now in question, in the minds of many Greek citizens as it is in the minds of many among our European partners.
The question before us all, as Europeans, is whether the European Union can rise to the challenge before it. It is necessary now, without further delay to turn a corner on the mistakes of the past and to forge a new relationship between member states, a relationship based on solidarity, resolve, mutual respect and a new hope for common progress.
'Viability of Union, and especially of the common currency, is now in question,' warns new Greek eurozone document
5.50pm BST
The reforms plan submitted by Greece today could raise between a4.6bn and a6bn of revenue (according to Athens' calculations, anyway).
Here's the details:
5.32pm BST
Peter Spiegel of the Financial Times has obtained the list of reforms which Greece has proposed to its creditors today.
It's 26 pages long, covering taxation, privatisations, Greece's public sector, its labour market and healthcare, among others.
The government requests a speedy and successful conclusion of the Final Review on the basis of this list, so that shortterm funding issues may be resolved and the current crippling economic and financial uncertainties brought to an end. This is an urgent and necessary precondition for the success of the economic and reform program.
The new reform measures are similar to Friday's initial effort and fail to address several issues that bailout monitors have insisted on, including an overhaul of the Greek pension system and further labour market liberalisation.
Indeed, the proposal appears to reverse past reforms in several of these areas. The document includes a1.1bn in new spending this year, more than half of it reinstating a so-called "13th pension" - an extra months' pay - for low-income pensioners. The document suggests that change would add a600m this year.
5.23pm BST
With delicious timing, the European Central Bank has just advertised for a Greek translator....
Hmmm RT @ecb: Job alert: Greek Translator (traineeship) - Communications http://t.co/rtzT1aaRry
5.12pm BST
The Greek government has provided further details of its reform plans to lenders today, in an attempt to unlock bailout funds.
Helena Smith reports that:
Greek officials say in addition to a3.7bn worth of fiscal measures the left-led government is proposing, privatisations worth a1.5 bn in 2015 have also been outlined in the package the finance ministry has drafted.
The operation and management of 14 regional airports (concessions long sought after by Germany) has been included in the privatisations.
* Greek Fin Min official says toughest issues in talks with lenders are labour and pension reforms - RTRS
5.10pm BST
Over in Athens, officials say a campaign of rumour, innuendo and deliberate leaks is being waged against the new government.
"They keep saying 'the Greeks are not well prepared, they haven't done their homework, their proposals are vague'; all of which are grotesque and preposterous lies.
The Greek side has never been as well prepared and the issue really is not whether they agree with our figures but whether they want an agreement."
"The banking system is at risk, outflows are growing, non-performing loans are mounting. What they are doing is criminal. The February 20th agreement was supposed to give us four months of financial stability and instead they are using it to asphyxiate us."
"The Euro working group prepares the ground for the euro group so if anything it would be surprising if there were a breakthrough....It seems they want to push us to the brink of Grexit, squeeze us to our last drop of blood and breath in the hope that they can get just a little bit more out of us."
"From the start we made that clear. The whole aim is to defeat this government. If they see us retreating they will wipe us out. From time of the Roman legions that is how the Germans have worked. We are not going to do them the favour."
4.21pm BST
Heads-up: Eurozone deputy finance ministers have just ended their conference call about Greece.
Euronews's Efi Koutsokosta reports that the Greek finance minister was also on the call:
#euroworkinggroup where @yanisvaroufakis also participated finished.
4.20pm BST
The Greek stock market has fallen again today, as the uncertainty and occasional eyebrow-raising headlines jangled nerves.
The main ATG index fell 1.3% by the close of trading.
4.16pm BST
The very fact that Greece could threaten to withhold its IMF repayment shows the need for a proper process to handle debt defaults.
So argues Eric LeCompte, Executive Director of the religious debt relief organization Jubilee USA Network.
"We're watching a poker match between Greece, the IMF and the European Union. The stakes couldn't be higher with the lives of millions of ordinary people on the line.
"This is more proof that we need a global bankruptcy process with rules that are above board. We can't be playing poker with people's lives."
Greece, here's what the IMF will do if you don't repay its loans on time. h/t @IanTalley: pic.twitter.com/9ZVQeuIkkp"
4.05pm BST
Greek government bonds have weakened today, pushing up the yields on its short and long-term debt.
Over in the City, Steve Collins has kindly tweeted the details:
Greek sweep : 10-yr 11.81 +18 5-yr 17.10 +18 3-yr 23.31 +69 Not the highest we have seen, but market taking today's rumours negatively
3.41pm BST
Greek gov't celebrates April Fool's Day in excellence.
3.30pm BST
The Athens government has moved swiftly to deny that it won't meet its a450m repayment to the IMF next week unless its gets a bailout payment quickly.
A government spokesman has denied Spiegel's story, and insisted that it still hopes for a 'positive' outcomes to the current situation.
#Greece sources tell @capitalgr that Voutsis comments re IMF payment not new,were similar 2 what was mentioned in the Tsipras letter 2Merkel
3.26pm BST
That Spiegel story suggesting Greece might not repay the IMF next week has sent ripples through the financial markets.
Nikos Voutzis's comments have left traders edgy that the Greek crisis may be flaring up again....
Greece choosing not pay IMF loan on April 9 without backstop is more "Lehman Brothers" than "AIG" - let's hope it doesn't get there.
Market wobbling on this headline: *GREECE DOESN'T WANT TO RESPECT IMF APRIL 9 DEADLINE: SPIEGEL
3.06pm BST
The crisis just took another twist. Germany's Spiegel news magazine is reporting that Greece might not meet the a450m loan repayment due to the IMF next week.
Greek Interior Minister Nikos Voutzis has apparently told the paper that, without fresh bailout aid, Athens would be forced to miss this payment.
No April fool's day joke: #Greece doesn't respect #IMF Apr9 deadline (when Greece is due to repay a460mln), BBG reports citing Spiegel.
One of the biggest problems for Greece is that it is still working with the Fund and relies on its sign off (as part of the 'institutions') to get its current review completed and therefore funding released. The response of the fund on the ground will therefore be important. Of course, the fund finds itself in a bit of a circular position. It is unlikely to get paid if it does not approve Greece's review, but how can it approve the review if it is not getting paid?....
Gap with creditors grows, reputation harmed: Linked to the above, given that not paying the IMF is usually a course of action reserved only for war torn countries or those on the fringes of the international system, not to mention severly underdeveloped economies, Greece could see its reputation severely dented. Furthermore, it is possible that Greece's creditors will see that Greece has decided to pay wages and pensions first rather than meet its commitments to them. Whether or not this is a fair assessment, this could drive further animosity between the two sides.
So what happens if #Greece fails to pay the IMF on time? Time to read our blog post from this morning: http://t.co/RYrzXAN18I
2.04pm BST
A brief recap:
Eurozone deputy finance ministers will hold a conference call shortly to discuss the state of play around Greece's reform plan.
"The agreement will close on (Greek Orthodox) Easter week.
Greek negotiations are widening the spread between its yields and the rest of the periphery http://t.co/M2PU92yRim pic.twitter.com/zWU9HbmrZG
Related: UK productivity growth is weakest since second world war, says ONS
1.39pm BST
We've not seen so much of Yanis Varoufakis, recently -- hopefully he's been hard at work writing that economic reform plan.
But Greece's finance minister has just appeared on Twitter, to plug a 'witty' joke about Greece moving to Bitcoin.
Happy April Fool's Day everyone... http://t.co/HELEDGDpOk
Yeah @FAZ I was nearly chuckling until I realised you printed my phone number and my phone is now unusable. pic.twitter.com/t7ohYQ35HP
In grand scheme of things of course, this might be one of the more accurate FAZ stories about the ECB. (Spoiler: there is no restaurant.)
1.18pm BST
Interesting....
#Greece Gov't to present new fiscal measures at #Eurogroup Working Group's teleconference call this pm, @euro2day_gr reports
1.16pm BST
Germany's finance ministry has confirmed that eurozone deputy finance ministers will hold a conference call this afternoon, to discuss the state of play around Greece.
But it has also dampened hopes that this call would take the eurozone closer to an agreement over Greece's reform plans.
"In the best case scenario we expect there could be some kind of preliminary interim review but it's hard to predict how things will develop next week."
"The agreement will close on (Greek Orthodox) Easter week."
12.59pm BST
Last week, I rather expected that we'd soon see another late-night crunch session in Brussels to debate Greece's finances.
But this (obviously) hasn't happened yet. And as long as we don't have an agreement between Greece and her creditors over a reform package, it's not going to happen.
More I talk to people here, the more saying no #Eurogroup before regularly-scheduled meet Apr 24 in Riga. No sign of #Greece deal in sight
12.47pm BST
Journalist Loukia Gyftopoulou has more details about those protests, and arrests, in the Greek parliament courtroom this afternoon:
Anarchist invasion in Parliament will be a real test for gov after #Syriza promised absence of police in dems. So far 15 detained #Greece
Protesters demand abolition of anti-terror laws, prisoners' release and closure of maximum security prisons #Greece
12.31pm BST
Greek police have now swept into the parliament courtyard to break up the protests:
Greek police make arrests follwing invasion of parliament courtyard - VIDEO - http://t.co/MZaPieO5oq pic.twitter.com/oo43MPvkn2
12.17pm BST
It's all looking rather lively in Greece today.
A group of protesters are now demonstrating on the courtyard of the Greek parliament, as part of a solidarity campaign with prisoners conducting a hunger strike.
Solidarity action at the Greek parliament #now by anarchists #hungerstrike2015 p/v @kinimatini #antireport pic.twitter.com/sjLvz1kkHw
Group of anarchists invade Greek Parliament courtyard - http://t.co/hZjiawBtcs pic.twitter.com/5ZiWtmzGcM
Speaker GR Parl Konstantopoulou's first comment on the anarchists' break-in was "you got jumpy bc some people protested?" via @g_evgenidis
12.03pm BST
German economist Holder Schmieding blames the new Greek government for the downturn in its economic fortunes this year:
Berenberg Bank's Holder Schmieding on #Greece: "Rarely has a new government caused so much economic damage in such a short time."
11.46am BST
Over in Athens, pensioners have held an anti-austerity rally to demand pensions and healthcare benefits to be increased.
The elderly, who have faced several pension reductions since 2010, also demanded immediate subsidy of their pension funds and measures to restore damage caused by the 2012 haircut (PSI).
11.29am BST
Russia faces a lengthy recession, as the sanctions imposed over Ukraine weaken an economy already suffering from lower oil prices.
That's according to the World Bank, which has just slashed its forecasts for the Russian economy. It now predicts that GDP will shrink by 3.8% in 2015, and another 0.3% in 2016.
World Bank - says GDP in Russia to fall around -3.8% in 2015 assuming $53 oil
11.14am BST
Ireland's economy continues to bounce back from the lows plumbed during the financial crisis, when its banking collapse triggered a eurozone bailout and years of austerity.
Data just released show that Ireland's unemployment rate has fallen to 10%, from 10.1%. The number of people claiming unemployment benefit fell by 4,700 to 350,600, down from 450,000 five years ago.
#ireland Central Bank's 2015 GDP Forecast Revised To +3.8% Vs +3.7%, 2016 Revised To +3.7% Vs 3.8% /via @livesquawk #euro
10.41am BST
Most European stock markets have defied expectations and rallied this morning, reversing yesterday's slide.
The news that eurozone factory growth strengthened last month helped to send shares up in Paris, Frankfurt, Milan and Rome.
Related: FTSE rebounds as banks lead the way
10.37am BST
Howard Archer, economist at IHS Global Insight, is also disappointed that Britain's labour productivity fell back in the fourth quarter of 2014.
He writes:
Productivity currently remains limited compared to pre-crisis levels and the latest relapse will fuel concern that much of this has to do with structural factors. How productivity develops going forward will be a critical factor in how soon and how far the Bank of England raises interest rates.
If productivity has taken a significant lasting hit, it means that the economy has less potential to grow without generating inflationary pressures and that interest rates will need to rise at an earlier stage.
10.13am BST
Back to Greece......and eurocrisis expert Yannis Koutsomitis is tweeting some interesting developments around its funding needs:
#Greece Public Debt Agency head Papadopoulos to meet with @PIMCO execs today over next week's T-bill auction ~@EFSYNTAKTON
#Greece | General Accounting Office notifies Gov't cash runs out May 15 http://t.co/OhDhBjiNGn /via @EFSYNTAKTON
10.10am BST
Vicky Redwood, UK economist at Capital Economics, is concerned that Britain's productivity fell by another 0.2% in the last quarter:
"This still isn't great - productivity has still not even returned to its long-run average rate of about 2%, let alone recouped any of the shortfall relative to its pre-crisis trend."
10.08am BST
Britain's persistently weak productivity gives another insight into the true state of the UK economy, as politicians trade blows ahead of May's election.
Today's ONS report shows that David Cameron has presided over an economy with the weakest productivity record of any government since the second world war, says economics editor Larry Elliott.
We're no more productive (q4 2014) than we were in 2007 (ONS): "the absence of productivity growth...is unprecedented in the post-war period
If reducing corporation tax increases wages and investment, then why have real wages and productivity been taking a hammering?
9.55am BST
Despite the recovery, Britain's economy still suffers from weak productivity.
Data just released by the Office for National Statistics shows that labour force productivity fell by 0.2% in the last three months of 2014.
The absence of productivity growth in the seven years since 2007 is unprecedented in the post-war period.
7 lean years of no productivity growth... Time for a biblical analogy?
9.36am BST
Eight-month high for UK manufacturing purchasing managers' index counters some of those slowdown fears: http://t.co/16fY2GkFMk
9.36am BST
March was a good month for UK factories too -- the sector grew at its fastest rate in eight months.
The UK manufacturing PMI rose to 54.4 in March, up from 54.0 in February, thanks to strong domestic demand. Export orders picked up too, as the "bright start to the year" continues.
9.25am BST
Greece is not sharing in this revival in the eurozone economy -- its factory sector contracted again last month.
Greece's manufacturers reported a third straight monthly drop in output in March, confirming that economic conditions have deteriorated since the country's political upheaval began.
Weighing on overall inflows of new business was a sharp and accelerated decrease in new export orders, which panel members linked in part to foreign clients being deterred by political uncertainty in Greece.
9.13am BST
The eurozone's economic recovery has strengthened, as manufacturing activity across the region grew at the fastest pace since last May.
Growth accelerated in Germany, Spain, Italy and the Netherlands, as the European Central Bank's quantitative easing programme stimulates demand and drives down the euro.
"Producers are benefitting from the weaker euro, which has had the dual effect of boosting competitiveness in export markets as well as making competing imports more expensive in the home markets.
"New orders are consequently showing the best growth for nearly a year, and the fact that manufacturers are boosting their payroll numbers at the fastest rate for three-and-a half years indicates optimism that the upturn will be sustained in coming months.
8.58am BST
Those French and German PMIs are both higher than the 'flash' readings two weeks ago, suggesting that conditions improved during March.
Upward revisions to final PMIs (Germany/France) suggest positive momentum continued in the past 10 days or so. #QEuphoria #QEboost
8.57am BST
Here comes Germany's manufacturing PMI...
...and it's another month of solid growth for factories in Europe's largest economy.
8.52am BST
France's factory sector has shrunk again, but at least the pace of decline has slowed.
The French manufacturing PMI came in at 48.8 for March, up from 47.6 in February -- but still below the 50-point mark that splits expansion and contraction.
France Manufacturing #PMI rises to 48.8 but still signals deteriorating business conditions http://t.co/bJEqHa6k3W http://t.co/6u8ZIS0WFp
8.49am BST
Finally some good economic news for #Italy As its manufacturing #PMI rises to 53.3 http://t.co/4I79ddcDIF #ECB #QE #Euro
8.49am BST
Good news from Italy too -- factory output has hit an 11-month high last month.
Data firm Markit reports that the Italian manufacturing PMI jumped to 53.3, from 51.9, showing that the sector expanded. Growth is "gathering momentum", it says, with firms hiring staff at the fastest rate since February 2011.
8.41am BST
Spain's economic recovery continues to pick up pace, as the weaker euro gives Spanish firms a boost.
The Spanish PMI jumped to 54.3 from 54.2, which is another month of solid growth.
The highlight from the latest survey was the strongest rise in employment since mid-2007, as the labour market continues to recover.
Meanwhile, the sharp reductions in input prices seen in the first two months of the year were not repeated at the end of Q1 as the weakness of the euro led to rises in the cost of imported items."
8.34am BST
Turkey's factory sector has contracted at the fastest rate in almost six years.
Turkish manufacturing downturn intensifies in March, #PMI at 48.0 (49.6 in Feb), lowest since April 2009 http://t.co/TZAzecfbof
8.18am BST
Russia's factory sector continued to contract last month.
"March's survey data indicated that operating conditions remained challenging overall, with output, new orders and employment all posting modest falls. Access to working capital also remains a hurdle to overcome for a number of manufacturers."
8.09am BST
Overnight, an official survey of the Chinese factory sector was a little stronger than expected in March, driving the Shanghai stock market to a new seven-year high.
Overnight data from China - especially HSBC manufacturing survey - point to a further slowdown in growth.
7.57am BST
With a deal before Western Easter looking very unlikely, Greece's government has now declared that it will reach agreement with its lenders before Orthodox Easter (which falls on 12 April).
"The agreement will close on (Greek Orthodox) Easter week."
"The idea that prevailed is that we will not proceed with a privatisation of the 67 percent stake, which would mean a full privatisation of Piraeus port. We are not discussing this."
"We are trying to find some kind of joint venture."
7.50am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
With Greece's negotiations with its creditors over economic reforms seemingly becalmed, eurozone finance officials will hold a teleconference call today to assess the state of play.
"If it turns out the Greeks leave, that may not be a bad thing for the euro.
"If everybody learns that the rules mean something and if they come to general agreement about fiscal policy among members, or something of the sort, that they mean business, that could be a good thing."
#FTSE expected to open around 20 points lower. European stock index futures down on #Greece bailout uncertainty
Eu #daybook: manufacturing PMI data; ECB policy makers are said to be holding weekly review of Emergency Liquidity Assistance to Greece Wed.
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