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May 31, 2016

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Standoff over corrective actions

Last week the corrective actions Greece has to take to get the first part of its payout seemed only a technical formality. Over the weekend it turned into another political standoff. We don’t know yet whether this is for real or just to show that the Greek government will not cave in without fight. But, according to an exclusive story by Ta Nea (hat tip KT Greece), Euclid Tsakalotos wrote a letter to the institutions informing them that eight of the prerequisites will not be implemented. EU lenders in return won't accept this, Kathimerini reports. 

One of the measures the Greeks take issue with is the demand to deliver a Plan B in case the privatisation of the Independent Power Transmission Operation (ADMHE) fails. They also refuse to provide for unfreezing special payrolls (armed forces, police, coast guard), and to stop providing insurance for accidents at work. Ta Nea writes these are 8 out of 150 to-dos (though other reports say there are 15 in total), although the remaining ones are more technical in nature. According to Kathimerini, the two big subjects of discontent are the inclusion of state-backed loans under the sales provisions for non-performing loans and the payback of supplementary pensions (EKAS) by some 100,000 pensioners. 

There were reports yesterday that the government is planning to submit its own amendments to parliament on Wednesday. If the disagreement between Greece and its creditors persists, then it is likely to be discussed at the euro working group on Thursday. These fresh delays also mean that parliamentary approval might not come in time for the ECB meeting on Thursday, where the reinstatement of a waiver on Greek bonds is to be discussed.

Our other stories

We also have stories on the German grand coalition falling below 50% for the first time; on European deposit insurance going nowhere; on Atlante about to take over Veneto Banca; on the Catalan government on the brink; on French strikes; on which of the EU's multiple crises will blow up first; on the lack of eurozone convergence; and on Verhofstadt losing patience with the pro-Europeans.

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