|
 Sources close to the negotiations said the creditors had presented
counter-proposals to Athens to overcome differences, with euro zone
finance ministers due to convene at 1 p.m. EDT to try to approve an
agreement.
Before flying to Brussels for meetings with the creditors, leftist
Greek Prime Minister Alexis Tsipras attacked the stance of "certain"
creditors as strange because he said they had rejected measures
Athens put forward to plug a budget gap.
"The repeated rejection of equivalent measures by certain
institutions never occurred before - neither in Ireland nor
Portugal," Tsipras tweeted.
"This odd stance seems to indicate that either there is no interest
in an agreement or that special interests are being backed."
Financial markets reacted nervously to the downbeat comments from
Athens, with investors rushing into safe-haven German bonds [GVD/EUR]
and the euro suffering a brief sell-off before regaining ground.
A European Union official insisted the talks had not broken down and
the exchange of different proposals was a normal part of the
negotiation. Greek Economy Minister George Stathakis said only three
of Athens' 50 proposals were still in dispute.
But because there is so little time left to reach a deal before
Greece has to make a repayment to the IMF on June 30, the day its
current bailout expires, the talks were particularly fraught.
"Of course we want changes and they don't, and this is part of the
bargaining process, albeit less effective when done publicly," a
senior official of one of the creditors said.
TSIPRAS TO MEET LENDERS
Tsipras, who arrived in Brussels at 7 a.m. EDT, was due to meet
Commission President Jean-Claude Juncker and the heads of the
International Monetary Fund, the European Central Bank, the
Eurogroup of finance ministers and the euro zone's rescue fund in
the early afternoon to try to thrash out remaining issues.
Before that, Juncker was meeting with the other leaders of the
creditor institutions to prepare a common position.
Other issues still in dispute included the restoration of collective
bargaining rights, opening up closed professions, investment and
public sector wages, according to a source close to the talks.
Officials said the IMF was most concerned about the balance of the
package, which was too heavily skewed toward tax increases that
could further weaken the Greek economy and prove hard to collect,
rather than structural reforms.
Also still in dispute were Greek demands for debt relief, which euro
zone governments do not want to address at this stage, and IMF-led
pressure for more steps to reform Greece's costly pension system.
The Greek proposals, which leaders of the 19 nations sharing the
euro welcomed on Monday as a basis for further negotiation, included
a series of tax hikes and higher contributions to pensions to raise
revenue and hit budget targets.
Greece will have to put the agreed measures through its parliament
by Monday so that some other euro zone parliaments can endorse the
deal and unblock aid funds.
[to top of second column] |
Athens must repay 1.6 billion euros to the IMF next Tuesday. EU
officials said the only way to provide money for that payment was
for euro zone governments to hand over nearly 2 billion euros in
profits from ECB holdings of Greek government bonds purchased in
2011-12.
CONSEQUENCES OF DEFAULT
If Greece misses that payment and is declared in default to the IMF,
it could trigger a bank run, capital controls and an eventual Greek
exit from the euro zone, undermining the foundations of the
currency.
Tsipras will face resistance in his leftist Syriza party, especially
if he has to make further concessions at the last minute, but
Stathakis said he was convinced the party would back a deal in
parliament.
A series of street protests in Athens in recent days, some organised
with Syriza's support, have underlined public opposition to yet more
belt-tightening.
"There are four people in my household, and we are living on 600
euros a month. Where else does that happen?" said 59-year-old
Antonia Methoniou, a cancer patient who took early retirement for
health reasons.
The IMF says Greece will need either some form of debt restructuring
or further loans to make its finances sustainable.
But euro zone officials insisted that the creditors would not
discuss any debt restructuring until after Greece implements the
remainder of its bailout program, and German Chancellor Angela
Merkel has ruled out any "haircut" or debt write-off.
This will add to the difficulty of getting parliamentary approval in
Athens, notably from the nationalist Independent Greeks, whose
support Tsipras needs for a majority.
They also reject moves to scrap VAT exemptions enjoyed by some Greek
islands.
"I could not vote for such a measure, nor, obviously, could I
participate in a government violating a line on which we received a
mandate from the Greek people," party leader Panos Kammenos tweeted
on Tuesday.
But Economy Minister Stathakis said he was confident parliament
would back a deal before June 30: "I think this balanced deal is
defensible to Syriza, and in Greek society too."
(Additional reporting by Karolina Tagaris, George Georgiopoulos and
Renee Maltezou; editing by James Mackenzie and Kevin Liffey)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
