Greece submits new proposals but creditors remain skeptic

Greece showcased new economic reform proposals in hopes of a new bail out offer from creditors. The new proposals sound much better but a lot of EU leaders remain skeptic.

Athens has come up with a desirable proposal that will hopefully urge its creditors to formulate a new Greek bail-out offer. The 13-page proposal hopes to create approximately 1% additional revenue. Reports add that the new proposal includes new terms in the collective bargaining of Greece. It also plans to overhaul several product markets such as the pharmaceutical industry.

The Wall Street Journal reports that Germany Chancellor Angela Merkel, who represents one of Greece's major creditors, says the new proposal has to overwhelm the creditors in a good way because the new bail out will run for 3 years. If this bail out negotiation will succeed, it will be the third for Greece since 2010. In a proposal copy seen by WSJ, one of the overhauls includes the removal of supplementary pension payment to the country's poorest retirees that is supposed to start in March 2016. In addition, Greece proposal plans to raise value-added tax on restaurants up to 23% while removing discounts for the majority of Greek businesses. Although the new proposal no longer includes a one-off tax on companies, it mentions the previously creditor-approved increase of corporate taxes from 26% to 28%. Greece may have strong sympathizers in the person of German Chancellor Angela Merkel and French President Francois Hollande among others but there are members of the EU who still doubts Greece.

Dow Jones Business News reports that German Finance Minister Wolfgang Scha uble is concerned that some of the floating propositions will violate European rules such as reducing the face value of Greece's debts. The report adds that Hollande's efforts in siding with Greece against Berlin could emphasize accusations from members of the French Parliament who accuse him of disregarding his pro-growth campaign during the 2012 election.

Considering this would be the third time since 2010 that Greece might be rescued by EU makes politicians and taxpayers within the eurozone harbor doubts and hesitation on Greece's willingness to pursue growth. Some of the questions remain: how will Europeans protect the integrity of the eurozone? Will saving Greece do more harm or good for the countries in the EU?