The IMF and ECB aren't happy with Greece's reform proposals

Both the IMF and the European Central Bank have warned that the letter sent by the Greek government outlining its reform proposals are not in line with what was previously agreed. And this could pose a huge problem for Athens.

The letter sent by Greek finance minister Yanis Varoufakis was designed to calm nerves after a week of tense negotiations had left markets - and, most importantly, Greek depositors - needing to see some signs that Greece was at least nearing a deal over extending its bailout programme. It contained a detailed list of reforms that they hope will reinvigorate the country's ailing economy, reduce corruption and increase tax receipts.

Not everyone was impressed, however.

In her response, IMF managing director Christine Lagarde wrote that "in quite a few areas...including perhaps the most important ones, the letter is not conveying clear assurances that the Government intends to undertake the reforms envisaged in the [2012] Memorandum".

ECB president Mario Draghi struck an equally cautious tone warning that "the commitments outlined by the authorities differ from existing programme commitments in a number of areas".

Both acknowledge that the Greek authorities have been under significant time pressure to outline their reform agenda and, as such, the list of reforms presented represent only a rough outline at this stage. However, their warnings pour cold water over the idea that the Eurogroup's apparent acceptance of the letter means that it will be easy for Greece to strike a deal on extending its bailout programme.

The problem is that if these reforms are not acceptable to two of the three institutions formerly known as the Troika then their passage through European parliaments - where any extension of the bailout must be voted upon - may become that much more complicated. Especially with a large portion of Greek repayments scheduled for this year owed to either the IMF or the ECB:

Their support is absolutely crucial to the success of the Syriza-led government's plan for a renegotiation of the terms agreed in 2012. Those included the objective of the Greek government reaching a primary surplus of 4.5% of GDP in 2014 as well as comprehensive tax reforms and the privatisation of a number of state-owned industries.

Lagarde clearly does not feel that the latest missive from Athens goes far enough to meeting those commitments. She points to "comprehensive pension and VAT policy reforms", "privatisation" and "labour market reforms" as key areas where the latest reforms do not appear to go far enough. These could be seen as the IMF's red lines - just as Varoufakis suggested that there were red lines that the Greek government would not cross.

As the basis for discussion the Greek proposals might just do a good enough job of getting a short extension to the bailout programme. But the government in Athens will need to demonstrate that they are willing to compromise still further (even as Greek citizens are already reacting angrily to what they see as backtracking from pre-election promises). The response by the IMF and the ECB suggest that Greece is still a long way away from a comprehensive deal.