In an op-ed in Project Syndicate, Greek Finance Minister Yanis Varoufakis laid out Greece’s stance in the negotiations with its international partners, highlighting the two main hurdles that need to be overcome for agreement on a new development model for Greece, namely on how to approach Greece’s fiscal consolidation on the one hand, and on a comprehensive, commonly agreed reform agenda that will underpin that consolidation path on the other. He argues that results of the method used in the previous years for fiscal consolidation led to the austerity trap, and the failed reform program to a reform trap.

"Additional wage cuts will not help export-oriented companies, which are mired in a credit crunch. And further cuts in pensions will not address the true causes of the pension system’s troubles (low employment and vast undeclared labor)" Varoufakis notes. The government however is eager to proceed with reforms like the rationalisation of the pension system by limiting early retirement, the partial privatisation of public assets, addressing non-performing loans, the creation of a fully independent tax commission and boosting entrepreneurship.

The Greek government wants a fiscal-consolidation path that makes sense and reforms that all sides deem important, Varoufakis adds: "Our task is to convince our partners that our undertakings are strategic, rather than tactical, and that our logic is sound. Their task is to let go of an approach that has failed," he concludes.

See also: Greek FinMin Optimistic over Deal