The earlier proposal on the table would force Greece to vote through four pages of additional ‘reforms’ by Wednesday night. Or, it would be forced to take a ‘temporary Grexit’ and an opportunity to restructure its debts.
Few details are available about the outcome of the European summit meeting anfd what compromised have been reached. Reports from Brussels say there were still two very large sticking points for Greece, namely that Greece wasn’t happy with the involvement of the IMF in the post 2016 package, and the demand for €50bn in asset sales, with proceeds held in another country, was far too high. Current understanding now is that the absolute maximum they could raise through privatisation is €17bn, and money should be kept in Athens.
It is thought Alexis Tsipras is refusing to be beaten down, and is winning some concessions from creditors.
Tsipras may have sunk the idea that €50bn of Greek assets would be transferred to a Luxembourg fund (under the control of the German development bank KfW). It could be rather fewer assets, and it might not be Luxembourg either.
The Greek PM may even succeed in removing the threat of a temporary Grexit.
The Greek publication Press Project has revealed that the Luxembourg “Institution for Growth” to which the 4-page eurogroup paper demands that €50bn of Greek state property must be transferred, is a wholly owned subsidiary of German KfW and the chairman of its board is none other than Wolfgang Schaeuble.
KfW, the German development bank had once before proposed h the creation of the Institution for Growth in Greece to handle Greek assets.
Two years ago, the creation of the IfG was announced by Schaeuble and Greek PM Antonis Samaras. And in 2014 the European Investment Bank (EIB) signed a Memorandum of Understanding with the Hellenic Republic concerning the contribution of the EIB to the “Institution for Growth in Greece” (IfG). The IfG would promote growth, innovation and employment through the provision of short and long-term debt and equity capital to small and medium-sized enterprises (SMEs), as well as smaller infrastructure projects necessary to enhance competitiveness in key selected sectors of the Greek economy.
“The IfG is being launched at the initiative of the Hellenic Republic, with the guidance and support of KfW Development Bank of Germany, the EIB Group and other investors” said the EIG representative.
At the time the agreement was signed by Kostis Hatzidakis, Minister of Development and Competitiveness, for the Hellenic Republic, and Werner Hoyer, EIB President, for the EIB Group, in the presence of Minister of Finance Yannis Stournaras ( in the Samaras government) but no assets changed hands at the time. The Press Project