BRUSSELS — The new Greek government vowed to take a disciplined approach to budgets, spending and tax collection in the financial plan it submitted for eurozone approval, but said it remained committed to easing the “humanitarian crisis” caused by years of economic hardship and high unemployment.
In trying to achieve that delicate balance — to meet the demands of its European creditors in order to keep the loan money flowing, but without reneging on the anti-austerity campaign promises on which it was elected — the government of Prime Minister Alexis Tsipras may find a difficult road ahead, whether or not the new plan passes muster with eurozone finance ministers.
Greece’s European lenders are set to decide on Tuesday whether to grant a four-month extension to the country’s bailout, after receiving the overhaul proposals from Athens just before midnight on Monday.
Senior members of the European Commission, one of Greece’s bailout monitors, showed support for the submission by Athens on Tuesday afternoon, before a decisive conference call of finance ministers from the eurozone countries.
The Greek proposal “is sufficiently comprehensive to be a valid starting point,” Valdis Dombrovskis, a vice president at the commission, and Pierre Moscovici, the commissioner for economic affairs, wrote in a letter to Jeroen Dijsselbloem, the head of the Eurogroup of finance ministers.
The Greek proposals should lead to “a successful conclusion” of a review of whether Greece was abiding by its promises to overhaul its economy and rein in its budget, they wrote.
Among the overhauls are plans to improve management of the national budget, and to enact changes to Greece’s taxation system, including changes to sales tax policy, “with a view to limiting exemptions while eliminating unreasonable discounts,” according to a letter that Yanis Varoufakis, the Greek finance minister, submitted to Mr. Dijsselbloem.
The letter emphasized Greece’s commitment to curbing tax evasion, particularly among the wealthy, and said that fighting corruption was “a national priority.”
The government also committed not to reverse existing privatization plans and said it would review planned sell-offs with a focus on bolstering “the state’s long-term benefits.”
In addition to streamlining the public sector, the government will review public spending at every level and will modernize the pension system in an effort to end “loopholes and incentives that give rise to an excessive rate of early retirements.”
The country still plans to raise the minimum wage, one of the government’s pre-election promises, but pledges to do so in a way that safeguards competitiveness, the letter said.
The opportunity for Greece to submit the proposals was one of the few concrete concessions it won in an accord reached with its creditors late on Friday in Brussels. That accord brought to an end the bitter standoff that began when Mr. Tsipras pledged to redraw or scrap the bailout agreement after he came to power in January.
European and Greek officials spent much of Monday exchanging drafts of the proposals to pare back austerity measures while ensuring that Greece can still meet fiscal obligations.
The government of Mr. Tsipras had an opportunity to put its “political stamp” on a bailout plan if it respected budget targets, Mr. Dijsselbloem told the parliamentary committee.
The deal to extend the country’s bailout program with European creditors by four months is subject to the approval of the Greek Parliament, where some members of Mr. Tsipras’s radical-left Syriza party have called the plan a capitulation after the party’s anti-austerity campaign promises.
Also on the list submitted by Mr. Varoufakis are plans to crack down on the smuggling of fuel and tobacco, which cost the Greek economy billions of euros a year in unrecovered tax revenue, to address tax arrears and nonperforming bank loans, and to support struggling homeowners who are unable to meet their mortgage payments.
The overhauls will also address what Syriza has described as Greece’s “humanitarian crisis,” referring to the need for food stamps and other assistance to poor families, but Athens said the measures would be mostly “nonpecuniary” and would have “no negative fiscal effect.”
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