Greece Sends New Letter To ECB, IMF; Deutsche Bank's Saravelos Says It's Not A 'Full Backing Down'

two page letter to the heads of the European Commission, European Central Bank and International Monetary Fund. Various media reports, including the Financial Times noted that the letter implies the Greek government will accept most of the bailout creditor's conditions that were offered last weekend but still insists on making some changes that may pose a risk to finalizing a deal. The letter noted that the Greek government will accept all the reforms for the country's VAT (value added tax) but maintain a 30 percent discount for Greek islands. Eurozone officials previously argued that maintain the discount would increase the size of the nation's budget shortfall and create a complicated VAT system. In terms of pensions, the government hopes that the 2012 reforms (sustainability factor) be postponed until new legislative reform is implemented in October. In addition, the government hopes that its Pensioner's Social Solidarity Benefit (a "solidarity grant" paid to poorer pensioners) be phased out a slower rate than creditors have argued for. The letter also indicated the government will immediately implement specific recommendations from the OECD that cover areas such as tourism, beverages, petroleum products and conduct a competition assessment on specific sectors characterized by oligopolistic practices. Deutsche Bank's Global Co-Head of Foreign Exchange Research George Saravelos commented in a note on Wednesday that the letter is not a "full backing down" as various media reports are suggesting. "He [Greek Prime Minister Alexis Tsipras] is backing down on some measures, but on some of the most critical ones such as pensions he is not asking for decisions to be delayed to a bit later," Saravelos wrote.