EUROPEAN finance ministers are to reject radical reform proposals from Greece at a meeting in Brussels tomorrow.
The Greek finance minister Yanis Varoufakis will present a seven-point plan in a desperate attempt to unlock a €7.2bn (£5.2bn) cash injection — the final payment under a bailout plan agreed three years ago.
According to a source close to the discussions, European officials believe Greece needs to do more “on the ground”.
The plan, an outline of which was circulated on Friday, includes a proposal to hire tourists as undercover tax inspectors. It also includes more conventional proposals to generate cash, including the creation of a “fiscal council” that will oversee spending, and to update licensing of gaming and lotteries.
Greece’s new radical left- wing government is hoping the proposals will go far enough to release cash and prevent a full-scale default.
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Tomorrow’s talks follow on from negotiations last month in which eurozone ministers agreed to extend the country’s loan facility. The plan was to give Greece four months to come up with a new arrangement.
“Monday is too early for any agreement,” said Holger Schmieding, chief economist at Berenberg bank. “The Greeks are likely to be told to do much better than what they are proposing.”
Time is running out for Greece, which faces crucial loan repayments this month and in April. Analysts forecast that the country may face a cash shortfall of more than €10bn (£7bn) this month.
Last week it struggled to scrape together enough cash to repay a loan to the International Monetary Fund. It made a partial repayment of €310m on a €1.5bn debt that falls due over the next two weeks.
Athens’ inability to keep up payments on its mounting debt is raising fears that the situation could culminate in a messy departure from the eurozone.
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The European Central Bank (ECB) has refused to give permission for the Greek central bank to issue more short-term bonds. “The ECB has still got a rope around our neck,” the Greek prime minister Alexis Tsipras said on Friday.
Greece is to be excluded from the ECB’s quantitative easing (QE) programme, which will begin tomorrow.
Mario Draghi, president of the ECB, is expected to print €14bn a week to buy European government debt. The move is expected to further depress the value of the euro, which is flirting with parity with the US dollar.