Tsipras says deal ‘in sight,’ but party denounces terms
Greece to package June debt payments into one lump sum
ATHENS/BRUSSELS • Leftists in Prime Minister Alexis Tsipras’ party vented fury on Thursday at terms proposed by Greece’s creditors for a last-ditch deal to stave off bankruptcy and European officials acknowledged that large gaps remain to be bridged.
Tsipras emerged from late-night talks with senior EU officials in Brussels saying a deal with international lenders was “within sight.”
To alleviate some pressure, Greece will bundle its four debt payments to the International Monetary Fund due this month into a single payment now due on June 30, the IMF said on Thursday.
“The Greek authorities have informed the Fund (on Thursday) that they plan to bundle the country’s four June payments into one, which is now due on June 30,” the global lender’s chief spokesman, Gerry Rice, said in a statement.
The IMF said that under a decision taken in the late-1970s, its member nations can ask to bundle multiple principal payments into one payment to address the administrative difficulty of making multiple payments in a short period.
Still, Greece and its creditors must reach an agreement on the bailout negotiations — and Tsipras rejected pension cuts and a tax rise on electricity that he said European and International Monetary Fund creditors were demanding along with other conditions to win the release of frozen loans and avert a default that could hit eurozone and world markets.
Sources familiar with the creditors’ five-page plan said it also asked Athens to commit to selling off state assets and maintaining unpopular labour reforms — demands that would cross the ruling Syriza party’s declared red lines.
The lenders were demanding that Greece reduce spending on pensions by one percentage point of gross domestic product and raise a further 1.8-billion euros by increasing valueadded tax on products ranging from drugs to electricity, the sources said.
European Commission President Jean-Claude Juncker, who put the proposal to Tsipras at a late-night dinner along with the chairman of eurozone finance ministers, Jeroen Dijsselbloem, said they had made some progress but it was not sufficient.
Dijsselbloem said the meeting that ended after midnight had narrowed down the remaining issues but differences were “still quite large” and Athens was expected to present alternatives to some of the lenders’ proposals within days.
An EU source said Tsipras could return to Brussels for further talks as soon as late Friday night, possibly along with top IMF and European Central Bank officials.
A Greek official said Tsipras would brief parliament on the state of the negotiations in Athens on Friday.
Time is running out to clinch a cash-for-reforms deal and get disbursements approved by eurozone national parliaments before the 240-billion-euro bailout program expires at the end of June.
In one concession, the lenders were offering to unlock 10.9 billion euros in unused bank bailout funds that would enable Greece to cover its financial needs through July and August — more than the 7.2-billion euros left in the expiring bailout.
German Chancellor Angela Merkel, the EU’s most powerful leader, has been forcing the urgent pace of negotiations, at least partly to avoid a meeting of Group of Seven leaders she will host in Bavaria from Sunday turning into another emergency summit on the eurozone. A German spokesman said Tsipras would not be invited to the G7.
A Greek government official told reporters that Athens hoped to wrap up the talks by June 14, leaving just enough time for parliaments in Germany and elsewhere to approve the plan. He also said Greece aimed to incorporate more elements of its own rival document in a final agreement.
As partial details of the lenders’ proposal leaked out, members of Tsipras’ government and his Syriza party denounced the conditions as unacceptable. The backlash highlighted the risk of a revolt in Syriza if the prime minister decides he has to accept the deal.
“(Juncker) took on the dirty work and conveyed the most vulgar, most murderous, toughest plan when everyone hoped that the deal was closing,” Alexis Mitropoulos, a deputy parliament speaker and senior official within Syriza told Mega TV. “And that at a time when we were finally moving towards an agreement we all want because we rule out a rift leading to tragedy.”
Avgi, the Syriza party newspaper headlined Thursday’s edition: “A continuation of austerity? No, thanks!”.
Some lawmakers in the ruling party have said Tsipras could call early elections or a referendum if he had to accept a deal that crossed Syriza’s “red lines.”
Conservative opposition leader Antonis Samaras, who led the government that implemented much of Greece’s tough bailout before being defeated in January, urged Tsipras not to call elections but to seek a national consensus on the negotiations.
With Europe’s big powers, and the United States, concerned about the unpredictable outcome as Greek reserves shrink toward zero, the creditors also showed some willingness to compromise by lowering the budget surplus that Athens will be required to run before debt service payments.
However, since the Greek economy has fallen back into recession, lowering tax revenues, the lower target will still require painful retrenchment.
“I believe an agreement is in sight,” Tsipras said. “But we need to conclude the discussions with a realistic point of view.”