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The Greek theatre of absurd is entering its culmination, as late Thursday night the government of Alexis Tsipras sent to Brussels its new proposals to creditors. In practice, SYRIZA and Independent Greeks agree to implement the proposal that the creditor institutions sent them on 25 June, namely the one that the majority of Greek voters or 61% rejected in the referendum on 5 July.
    The situation however is even more absurd because, in the opinion of many analysts, after the introduction of the bank holiday and capital controls, the economic situation in Greece has sharply worsened and the measures of 25 June, i.e. before the announcement of the bank holiday, are no longer sufficient.
    As reported by the Financial Times correspondent in Brussels, Peter Spiegel, the Greek proposal consists of a letter from Prime Minister Alexis Tsipras, a letter from Minister of Finance Efklidis Tsakalotos and a 13-page proposal of measures that Greece will undertake in exchange for financial aid. For the first time the Greek proposal does not mention the requirement for Greek debt reduction and for the first time again, it strongly underlines the willingness of Greece to remain part of the euro zone. To recall that the categorical opinion of former Minister of Finance Yanis Varoufakis was that the Greek debt is not sustainable and it must be restructured.
    "With this proposal the Greek people and the Greek government shows its commitment to carry out reforms and thus to ensure Greece’s staying in the euro zone and emerging from the crisis," reads the letter of Alexis Tsipras to creditors. Minister of Finance Efklidis Tsakalotos is even more eloquent, "This proposal ensures our commitment to remain an integral part of the euro zone and to comply with all rules of our monetary union, which ensure fiscal and financial stability, sustainable economic growth and public administration reform."
    An overwhelming majority of 95% of Greece’s Council of Ministers approved the content of the 13-page reform and this morning it was tabled for consideration by the Greek Parliament. It in fact contains the measures proposed by the creditors on 25 June, namely a primary budget surplus of 3.5% until 2018, 23% VAT on all foods, a single VAT system for the tourist islands like Santorini and Mykonos and a lower VAT for remote and unpopular islands, as the Greek Government proposes. An interesting fact to note is that Santorini and Mykonos rejected the proposal of creditors by an overwhelming majority in Sunday's referendum. The new VAT system will provide each year additional budget revenues of 1% of GDP, i.e. about 1.8 billion euro per year.
    With regard to the pension reform, creditors insist on its immediate implementation whereas the Greek government provides for its application to begin from October 2015. Tsipras’ team however agrees to gradually increase the minimum retirement age to 67 until 2022 and to eliminate the "solidarity" gift for the low pensions from 2019.