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 Athens had proposed increasing VAT, corporate tax and pension
contributions in order to meet budget targets, but Tsipras told
aides that creditors had not accepted the revenue-raising measures,
a Greek government official said.
"This strange attitude can only mean one of two things: either they
do not want an agreement or they are serving specific interests in
Greece," Tsipras said in a tweet.
Markets reacted nervously to the comments from Athens, but a
European Union official close to the talks, who declined to be
named, made clear talks were continuing:
"Nothing has broken down, negotiations are going on and the meeting
with Tsipras will go ahead as planned."
Still, with time running out before the June 30 deadline when Greece
has to repay 1.6 billion euros ($1.79 billion) to the International
Monetary Fund or go into default, another EU official close to the
talks said major differences remained.
"Positions before the meeting with Tsipras are still apart on many
points," the source said, listing pensions, VAT and corporate
taxation. "There was not much progress yesterday."
 The issue of debt relief, a key demand on the Greek side, had not
even been discussed, the official said.
European stock markets gave back some of the gains made this week as
doubts returned over Greece [.EU]. Athens' benchmark ATG <.ATG>
equity index, which had risen 15 percent in the last two days, fell
3.6 percent and the Greek bank index <.FTATBNK> dropped 7.2 percent.
TSIPRAS IN BRUSSELS
Tsipras was to meet the heads of the European Commission, the IMF,
the European Central Bank, euro zone finance ministers and the
bloc's rescue fund in Brussels around 7 a.m. EDT to hear their
official response to Greece's proposals, EU and Greek officials
said.
Euro zone finance ministers were due to convene at 1 p.m. EDT to
finalize an agreement for the currency area's leaders to approve on
Thursday.
Tsipras, who came to power in January on a promise to end austerity,
has offered a package of measures based heavily on hikes to VAT and
corporate taxes and increases to pension contributions.
European leaders gave a cautious welcome to the proposals as a
negotiating basis on Monday, but they have also been criticized as
too dependent on growth-sapping tax hikes rather than spending cuts.
Many on the creditor side also doubt whether the Athens government
can actually raise the promised tax revenues, because the tax
collection system is so weak.
Tsipras must also deal with a backlash from his own leftist Syriza
party that could make it harder to get an accord approved in
parliament.
Economy Minister Giorgos Stathakis said lawmakers would have to
approve the package before Greece's international bailout expires on
June 30. Some euro zone parliaments, including leading creditor
Germany's, will also have to endorse it before the deadline.
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A series of street protests in Athens in recent days, some organized
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.
DEBT RELIEF
Greece has been pushing creditors hard to write off part of its huge
public debt, arguing that without it, the economy cannot recover
from a crisis that has cut overall output by a quarter and pushed
the unemployment rate to 25 percent.
But after months of fruitless and often acrimonious wrangling, there
has been no sign from European governments of any willingness to
accept a debt write-down, which they would have to explain to their
own electorates.
German Chancellor Angela Merkel explicitly ruled out any debt
"haircut" this week and EU officials say the most euro zone leaders
are likely to accept is a renewal of a vague commitment made in 2012
to consider further measures to improve Greek debt sustainability
once the bailout program is fully implemented.
But a lack of concessions on debt relief will also add to the
difficulty of getting parliamentary approval, 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, which they see as vital to the islands' survival.
"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 said in
a tweet on Tuesday.
However it remains unclear whether either they or potential rebels
in Syriza would actually vote against the government, at the risk of
triggering new elections and a financial crisis that could push
Greece out of the euro zone.
Stathakis said he was confident parliament would approve a deal
before Tuesday, saying: "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)
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