Troika Kyboshes Greek Reforms

Despite the fact that the European Commission in effect wrote the Greek letter outlining its proposed reforms, it seems that the Troika in the shape of the ECB and IMF are not yet on board.

The Troika has warned that Greece will have to do more if it is to be granted a €7.2bn bail-out extension before the end of the month.

Christine Lagarde, the director of the IMF, is quoted by the Telegraph warning that the Greek plan lacked “clear assurances that the government intends to undertake the reforms envisaged in the memorandum on economic and financial policies”.

The IMF still requires “clear commitments” on pensions, VAT, privatisation and labour reforms.

“We consider such commitments and undertakings to be critical for Greece’s ability to meet the basic objectives of its fund-supported programme.”

The ECB also voiced its lack of support for the reforms, as per Mario Draghi:

"We note that the commitments outlined by the authorities differ from existing programme commitments in a number of areas.

In such cases, we will have to assess whether measures are replaced with measures of equal or better quality in terms of achieving the objectives of the programme."

This hard nosed stance should come as no surprise, given that the letter from Greece contained no KPI's and was in effect a wish list of vague assurances.

Coming soon, capital controls!