Greece submit reform details, investors gear up for defaults

Greece on Wednesday has submitted new list of reforms, attempting to unlock final tranche of € 7.2 billion worth of bailout money. The details of the reform list can be obtained from the following link.

http://im.ft-static.com/content/images/55b27a7e-d87c-11e4-ba53-00144feab7de.pdf

• Current list of reforms are much more detailed compared to the one sent on Friday, which was not up to the mark according to the inspectors of Brussels group.
  
  
• Current document says all previous privatization would be honored, however future ones will be handled case to case basis.

• Despite this comprehensive list, recent talks suggest that inspectors remain partially satisfied over the list especially with pension reforms part, that suggested in addition fiscal spending of € 1.1 billion. They also pose doubts, over the claim by the government to raise as much as € 6 billion this year.

• According to sources familiar to the matter, resolution might not come until the next Euro zone finance minister meeting that is scheduled April 24, 2015, well past the due date of 9^th April to pay IMF € 0.45 billion.

Macroeconomic assumptions in the reform document are GDP growth for 2015 to be 2.9% and 3.6% for 2016. Authorities believe inflation to reach 1.1% by 2016 and unemployment to 19.5%.

• These base line assumptions pose doubts of its true ability to reach such levels and might be too optimistic.

Investors and traders continue to pose doubts on Greece and pushed credit default swap premium for 5 year debt close to 25%. Chart courtesy Soberlook.