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Greece, Lenders Meet on Working Methods to Start Reforms

  • Reuters

Greece's Finance Minister Yanis Varoufakis (R) speaks with a Greek delegation member an economic and financial affairs council (ECOFIN) at the European Council in Brussels, March 10, 2015.

Greece's Finance Minister Yanis Varoufakis (R) speaks with a Greek delegation member an economic and financial affairs council (ECOFIN) at the European Council in Brussels, March 10, 2015.

Greek representatives started talks with official international creditors in Brussels on Wednesday, taking the first step towards an agreement on the reforms Greece must implement to unblock further aid as Athens runs out of money.

It is the first such meeting between Greece and its official creditors since the new, left-led government in Greece took power at the end of January on a pledge to end the fiscal discipline that was the condition for almost 240 billion euros in loans that Athens has received since 2010.

EU officials cautioned, however, that the meeting on Wednesday, which began at 1300 GMT, would not produce any spectacular results and reform implementation would not even be discussed at this stage.

"They will discuss working methods," one European official said. "They have to agree on how to get on with it and that's why this will not be a particularly long meeting -- they should wrap it up by tonight or tomorrow."

Discussions on a concrete set of reforms that Athens would need to undertake to get the 7.2 billion euros from various creditors outstanding under the bailout would only start in the next meetings, officials said.

"These talks need to take forward the specification of the list of reform proposals envisaged by the Greek authorities in order to be able to reach an agreement at the latest by the end of April," Commission spokeswoman Mina Andreeva said.

Time is short because Greece could run out of cash by the end of the March, which could mean a default on payments that are due in the following months, unless it gets more loans from the eurozone.

While talks on what reforms will have to be done will take place in Brussels, technical teams of the Greek government and the creditors will work in parallel in Athens, because that's where all the necessary data was, officials said.

"The Greeks won't be expected to implement 100 percent of the measures envisaged by the bailout, no country under a bailout had done so, but they will have to do a critical majority -- let's say the 70 percent that was mentioned," the European official said.

Greek Finance Minister Yanis Varoufakis told Greek lawmakers in February that the government would implement about 70 percent of reforms included in the current bailout accord.

The list is likely to include the seven measures proposed by the new Greek government, which include the activation of an already legislated, but never created Fiscal Council to monitor government fiscal policy.

There would also be spending ceilings for various levels of government and corrective mechanisms that would kick in on a quarterly basis if ceilings were breached.

To end Greece's culture of tax avoidance, the government wants to hire large numbers of non-professionals to act as temporary tax inspectors. Recruited from among, for example, students, housekeepers or tourists, they would be wired for sound and video to gather evidence against service providers that avoid taxes.

The steps would also include taxing online gambling and ways to recover huge tax debts that Greeks owe their treasury.

"These reforms, together with dozens of others, will be part of the 'national plan of reconstruction and growth' which the government will present by April," a Greek official said.

"They will boost the 2015 budget, they will bring revenues through the year," he said.

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