Draghi Responds To Tsipras' Concerns Over Staff Level Agreement

European Central Bank President Mario Draghi responded Tuesday to a letter sent to him as well as the heads of the European Commission and International Monetary Fund by Greek Prime Minister Alexis Tsipras. In the letter (http://images.businessweek.com/cms/2015-07-01/BN_070115_9315.pdf), Tsipras informed the Eurozone leaders that his country was prepared to accept a Staff Level Agreement imposing a series of austerity measures in exchange for an extension of additional loans from the European Financial Stability Facility and the European Stability Mechanism. However, the PM said his government wouldn't sign on until a few conditions were met, tax code adjustments, military spending increases, and pension reform. Draghi, in his response, primarily addressed Greece's tax and pensions systems. He said that the tax framework outlined in the Staff Level Agreement "was designed to enhance the efficiency of tax administration and to better fight tax evasion." He maintained that Euro's requirements would promote "social fairness" by widening the base and thus making lower rates possible. Similarly, he said, the measures on the pension system described in the Economic Adjustment Programme was crafted to encourage "fairness" and "viability for future generations." According to him, they would primarily impact those receiving monthly checks of over €1,000. Draghi didn't directly address Tsipras' proposed amendments, but he demonstrated that the Troika seemed prepared to defend its logic behind the conditions for renewed Greek aid provision.