The Greek cabinet has submitted its new “credible” program to the EU. If you push past the Greek cover pages, you can find the full scanned copy in English on the Hellenic Parliament website here.

With some very minor differences, you’ll find that it’s practically a direct copy-and-paste of the EU proposals that the Greeks rejected just this Sunday past. So if you want to get an idea of what’s in there, here’s a slightly-amended copy-and-paste from my “Should Greece Vote No? Grexit, Stage Left” post:

  • Primary Budget Surpluses
    1. Greece will continue to collect more money than it spends (ie. the Greek government must turn an effective profit, before paying off its debts and interest).
    2. It will make a 1% profit margin* in 2015, a 2% profit margin* in 2016, a 3% profit margin* in 2017, and a 3.5% profit margin* in 2018.
      *the non-private sector term for profit margin is ‘budget surplus”.
  • VAT Reform
    1. Simplify VAT by making the rate for everything 23%;
    2. Except for basic foods, energy, hotels and water, which will be at 13%;
    3. Super-except for medicine, books and theatre, which will be a 6%.
    4. I still think that the theatre super-reduction is weird.
    5. Also, eliminate all discounts and simplify any VAT exemptions in order to make the VAT process easier to enforce.
    6. AMENDMENT: they’re going to eliminate the discounts for the islands quite slowly, starting with the high income islands first, and they’re going to continue to give discounts to the very remote islands.
  • Fiscal Structural Measures
    1. Tidy up the Tax Code by removing lots of the special-interest group exemptions.
    2. Fix other legislation which creates ring-fencing for special interest groups.
    3. Reduce military expenditure (AMENDMENT: over a slightly longer period)
    4. Raise the corporate tax rate from 26% to 28%.
    5. Introduce/extend some other special taxes that specifically target the wealthy.
    6. AMENDMENT: in the case of shortfalls, increase the corporate tax rate from 28% to 29%.
  • Pension Reform
    1. Basically, make it so that Greeks only become eligible for a pension from the age of 67.
    2. And redesign the pension system so that it’s more self-funded through contributions.
    3. SLIGHT AMENDMENT: slower implementation of those changes.
  • Public Administration, Justice and Anti-Corruption
    1. Standardise public sector wages.
    2. Sort out the department that prepares the statistics in order to get better statistics.
    3. AMENDMENT: start auditing State-Owned Enterprises, and impose stricter internal controls and internal audit procedures.
    4. AMENDMENT: adopt anti-corruption measures.
  • Tax Administration
    1. Get an autonomous tax collection agency.
    2. Change the wage-garnishing system to collect taxes more effectively.
    3. Do some things to combat fuel smuggling.
    4. Chase tax evasion by checking bank account transactions.
    5. AMENDMENT: also, some measures for transfer pricing.
    6. Put in place a plan to get more Greeks to pay with their cards rather than with cash.
  • Financial Sector
    1. Re-organise the insolvency laws. Because you get good-faith debtors and strategic defaulters – and those two should be treated differently.
    2. Also, let’s get that bankruptcy process moving along a bit faster. Geezlike.
  • Labour Market
    1. Start looking at changing the labour law – because it seems over-protective.
  • Product Market
    2. Privatise the Electricity Provider.
  • Privatisation
    1. Privatise everything else.

 Two possible conclusions:

  1. Greece voted “no” to the austerity measures in the proposal because they apparently weren’t harsh enough; or
  2. I’ve been focusing on the wrong part of the referendum question.

I guess there is a third conclusion, which is that Tsipras never expected to win, and was actually completely taken aback by the Greek “No” vote. I read this earlier in the week in the Telegraph article: Europe is blowing itself apart. This quote:

Greek premier Alexis Tsipras never expected to win Sunday’s referendum on EMU bail-out terms, let alone to preside over a blazing national revolt against foreign control. He called the snap vote with the expectation – and intention – of losing it. The plan was to put up a good fight, accept honourable defeat, and hand over the keys of the Maximos Mansion, leaving it to others to implement the June 25 “ultimatum” and suffer the opprobrium.

And to be honest, over the course of the week, with each passing day of promises to submit a new reform proposal “tomorrow”, that particular view became more plausible. Well, that, or Tsipras was aiming to take Greece out of the Eurozone all along.

But it’s entirely possible that the real issue is going to be re-written in Greek history as the second part of that referendum question:

Thanks this website
Thanks this website

Perhaps the Greeks were just rejecting that second document: “Preliminary Debt Sustainability Analysis“.

I mean – the document itself is laughable, because it projects that the Greek Debt-to-GDP will go down almost regardless of what happens. And it keeps talking about the “IMF baseline” predicting that as well.

Which, you know, hella awkward given that the IMF then released its own Preliminary Debt Sustainability Analysis which says, and I quote:

…it is simply not reasonable to expect the large official sector held debt to migrate back onto the balance sheets of the private sector at rates consistent with debt sustainability.

Given the fragile debt dynamics, further concessions are necessary to restore debt sustainability.

So, perhaps the Greeks were actually saying yes to austerity but no to austerity without debt relief?

Sounds like a reasonable spin to me. In fact, it almost sounds like it could have been the party line from the start.

Two Problems

  1. There is no mention in that proposal of debt relief (although it was sort of implied as a request in the accompanying cover letter); and
  2. Greek parliament still has to approve those reform proposals (tonight) – meaning that there’s only a day to make the same (if not worse) austerity proposals sound like a victory worth voting “yes” on.

On the other hand, there’s a humanitarian crisis unfolding. So perhaps it’s not so much about victory as it is about alleviation.

Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at