Will Greece’s reform proposals suffice for an agreement?

The Greek government last night presented its reform proposals, as its euro zone partners demanded. It is asking for an aid package worth around EUR 53bn for the coming three years. In return Athens is prepared to compromise on demands for reform on the part of its creditors. In the early Asian trade EUR was able to appreciate. 

The new proposals submitted by Athens are now however aimed at a third package based on the ESM that would run for three years. The German Chancellor Merkel had pointed out after the last Euro summit that the proposals from Athens for a bailout programme running for several years would now "have to contain further commitments". 

There is an indication that an agreement between Athens and its creditors is far from wrapped up. The Greek government will try and get parliament to pass the reform list as soon as today. At the same time the institutions (IMF, European Commission and ECB) will evaluate the proposals. Any critical comments from amongst the euro zone countries during the day are likely to dampen market hopes of an agreement. 

"Anyone who had bought EUR based on this hope is likely to be disappointed. However, on Monday we will know for certain whether Greece remains part of the euro zone or not", says Commerzbank.