Business
Wednesday June 24, 2015
A six days of a possible default
Greece withdrew some unpopular measures from the list of proposals creditors, such as increased pension contributions, Greek government sources reported.
Withdrawals measures amount to over 600 million euros of the 8,000 million of savings promised the creditors in the years 2015-2016.
The Greek delegation intended to replace them with equivalent measures in time for an agreement that will allow the IMF to pay a due later this month, and will avoid default.
Directed by Prime Minister Alexis Tsipras , the Greek delegation had initially proposed a health copayment 5% to supplementary pensions which were previously exempt.
“This has created a very bad impression among the people and the party” Syriza radical left in power, said a spokesman for Tsipras. This measure would provide 240 million euros in 2016.
Another government source said the government had decided, for the same reasons, also withdraw from their program of reforms a rise of one point (from 4% 5%) the health copayment for basic pensions, which translates into 135 million euros in 2015 and 270 million in 2018. Now, these amounts will have to leave other items.
It is apparently the first time since the start of negotiations between the new Greek government and its creditors (IMF, ECB and EU) Athens explicitly renounces proposals for not antagonizing public opinion and his party, as if there were agreement, it would to be ratified by the Greek Parliament.
On Wednesday, dialogue with creditors was particularly tense.
Creditors consider insufficient the proposals of Athens, as they contain too many insufficient tax increases and spending cuts.
The negotiations seem to run aground on demand heavy restructuring Greek public debt (180% of GDP), which some creditors reject outright.
Earlier, the Ministers of Economy and Finance of the eurozone found that there is still no basis for reaching an agreement with Greece, so they have decided to resume talks on Thursday.
The institutions, formed by the European Commission (EC), the European Central Bank (ECB) and International Monetary Fund (IMF have just briefed ministers “on process and the progress made so far, “said Eurogroup chairman Jeroen Dijsselbloem off the meeting that lasted barely an hour.
“Unfortunately we have not reached an agreement yet, but we are determined to continue the work. This work will continue during the night if necessary” , he said.
European sources said there was “very little progress” in the first meeting, so there was no chance to present documents ministers who serve as a basis for an eventual agreement.
Tsipras will be accompanied by Deputy Prime Minister Greek, Yanis Dragasakis , and the Minister of State, Nikos Pappas , while on the side of the institutions Dijsselbloem sit, the Presidents of the EC, Jean-Claude Juncker , and the ECB, Mario Draghi , and IMF Managing Director, Christine Lagarde, and the European Stability Mechanism (ESM), Klaus Regling.
Also participating in the negotiations the Vice President of the EC to the Euro and Valdis Dombrovskis, Social Dialogue and possibly the European Commissioner for Economic and Financial Affairs, Pierre Moscovici, according to European sources.
The meeting of the nineteen holders of Economy and Finance has already started with some delay and was marked from the outset by the differences between Greece and the IMF and the rejection of Athens to an amended proposal by this entity and other lending institutions.
According to Tsipras this again block negotiations after Monday his own plan was described as “good basis” for an agreement in a few days, because for Athens “creates several problems” in areas such as VAT, pensions and labor laws, according to government sources.
In contrast, European sources indicated that the document is “an attempt to bring the positions”, something that has not yet been achieved in view of the lack of results of the Eurogroup today and anticipating ministers and upon arrival at the meeting.
The German owner, Wolfgang Sch TM uble, said his “feeling” was that it had not progressed far from where the negotiations were on Monday of ministers and leaders and his Austrian counterpart, Hans Jörg Schelling, stressed that “the hardest part, the Greek insistence on restructuring” of the debt remains.
Also the Finnish Finance Minister Alexander Stubb, said that “there is nothing on the table” for the Eurogroup could make decisions, while Deputy Prime Minister and Minister of Finance Slovak Peter Kazimir, considered three Eurogroups and two summits should have been sufficient to achieve a compromise.
The Belgian Finance Minister, Johan van Overtveldt said to want “a good deal for the Greek economy so you can have a prospect in the future, but also one that is in line with what is good future prospects for monetary union. ”
The Spanish Minister of Economy and Competitiveness, Luis de Guindos, one of the few who expressed hope that an agreement is reached, albeit cautiously, said the differences that remain between Greece and creditors ” are not insurmountable, “but stressed that we must solve them within the” rules “that all must meet
.
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