|
 "If Greece says 'no go' now, it could be the final straw," one
senior European official said.
The lenders had given leftist Prime Minister Alexis Tsipras an
ultimatum to come up with a credible reform plan by mid-morning (5
a.m. EDT), saying they would otherwise send their own version to
Eurogroup ministers.
The dramatic move came hours before European Union leaders meet in
Brussels for a summit on migration, the long-term future of the euro
zone and renegotiating Britain's membership terms, that has been
overshadowed by the Greek debt crisis.
A Greek official said Athens was standing by the proposals submitted
on Monday with the inclusion of some modifications made during
negotiations this week.
The heads of the European Commission, International Monetary Fund
and European Central Bank set Tsipras the deadline to come up with a
new, workable proposal of reforms to unlock new funding and avert a
debt default next Tuesday.
Tsipras left European Commission headquarters smiling and flashing a
thumbs-up sign after three hours of meetings on Thursday but made no
comment.
 Euro zone finance ministers, known as the Eurogroup, were to meet
again at 7.30 a.m EDT after cutting short a meeting on Wednesday
evening because there was no draft agreement to discuss.
Diplomats said the lenders' tactics reflected exasperation at
Tsipras's refusal to compromise on key reforms of pensions, labor
markets, wages and taxation, which cross his Syriza party's
self-declared "red lines".
Greek officials close to the talks say the government has already
compromised on its red lines by offering to raise taxes and pension
contributions. They say the lenders showed a lack of will to do a
deal by changing estimates of how much each measure they propose
could raise, making it difficult to come up with an acceptable
offer.
Without a cash-for-reform deal in the next 48 hours, the chances of
Greece averting a default to the IMF look slim.
Failure to repay 1.6 billion euros owed to the IMF on Tuesday could
trigger a bank run and capital controls, followed by a slide out of
the single currency area.
Austrian Finance Minister Hans Joerg Schelling, a hardliner on
Greece, said the ultimate deadline for a deal was Sunday, a day
before a German parliament sitting that would have to approve the
release of aid to meet the IMF payment.
"BLACKMAIL"
Greek politicians in Tsipras' party continued to be defiant.
"The lenders' demand to bring annihilating measures back to the
table shows that the blackmail against Greece is reaching a climax,"
Nikos Filis, Syriza's parliamentary spokesman, told Mega TV.
He said the Greek side was maintaining its insistence on debt relief
as part of any accord, in comments that were echoed by Labor
Minister Panos Skourletis.
"There cannot be a deal without a substantial reference and specific
steps on the issue of debt," Skourletis said in an interview with
state broadcaster ERT.
[to top of second column] |
Frustration was palpable on both sides, with one euro zone official
describing the loss of trust in the Greeks as "extreme" and
questioning whether an agreement was realistic given the
intransigence from Athens.
In Frankfurt, a source familiar with ECB deliberations said powerful
German Bundesbank chief Jens Weidmann had expressed concern about
the continued provision of emergency liquidity to keep Greek banks
afloat despite deposit flight.
ECB policy-setters held the limit on this emergency funding for
Greek banks steady for the second day running after weeks of
increases.
Positive signals earlier in the week, when the Greek government
submitted a new list of proposals, mostly involving increases in tax
and social security deductions, have given way to a growing belief
that an accord is slipping away, although seasoned diplomats
cautioned that in EU negotiations the situation always seems
bleakest before a last-gasp deal.
Negotiators have been unable to produce an agreed draft text due to
lingering differences over pension reform, taxation, labor law,
public sector wages, the opening of closed professions, and
investment.
Among the most crucial unresolved issues are Greek demands for debt
restructuring, differences over reforming Greece's costly pensions
system and Athens' focus on tax hikes versus spending cuts.
The latest Greek proposals, made in a five-page document on Monday,
featured a series of tax rises on consumption, businesses and the
wealthy, as well as higher contributions to pensions to meet budget
targets.
"You can't build a program just on the promise of improved tax
collection, as we have heard for the past five years with very
little result," IMF chief Lagarde told French magazine Challenges on
Wednesday.
The more concessions Tsipras makes, the more resistance he will face
in parliament within his coalition and on the streets, where recent
protests, some organized with Syriza's support, have underlined
opposition to yet more belt-tightening.
"Lenders are opposing a tax on e-gambling but want a 23 percent VAT
tax on milk. Are they doing this for growth or (to serve)
interests?" Dimitris Papadimoulis, a Syriza lawmaker at the European
parliament, tweeted on Thursday morning. "The lenders' hard core
faction does not want a deal but a rift, Greece's humiliation and
the fall of the Tsipras government. It won't get its way."
(Additional reporting by Yves Herman, Michele Kambas, Renee
Maltezou, James Mackenzie; Writing by Noah Barkin, Paul Taylor and
Alastair Macdonald; editing by Anna Willard)
[© 2015 Thomson Reuters. All rights
reserved.]
Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
