Updated 17.15
GREECE HAS KNOCKED back budget measures put forward by its creditors that would enable the cash-strapped country to get its last instalment of bailout cash.
Its leaders rejected a counter-proposal from lenders only a week before a crunch payment on its debts falls due.
The demands from its EU-IMF creditors included even bigger tax hikes and public spending cutbacks than those already put on the table during the negotiations.
The latest development came as Greek Prime Minister Alexis Tsipras claimed the county’s lenders had been turning down proposals from his government that were similar to the ones cleared for nations like Ireland.
The ‘final stretch’
His officials have gone into the “final stretch” of talks with creditors to unlock the last bundle of much-needed bailout money, although hard-line German negotiators have said there remains ” along way to go” before a deal is struck.
The country, which faces a debt default if it can’t make a €1.5 billion payment to the IMF at the end of the month, has proposed a string of tax rises and spending cuts to fix its leaking budget.
However the IMF, which is believed to behind the harshest demands, has been cold on Greece’s suggestions that are skewed towards higher levies on businesses over lower public spending.
This morning Tsipras tweeted that “the repeated rejection of equivalent measures by certain institutions never occurred before” in either Ireland or Portugal.
Greece is trying to get the final €7.2 billion payment from its €240 billion bailout before the deal expires at the end of the month.
To seal the agreement, its leaders have proposed savings and revenue-raising measures worth a combined €2.7 billion this year and €5.2 billion in 2016.
Creditors are calling for the retirement age to be lifted from 62 to 67 by 2022, three years ahead of schedule, higher VAT on restaurants and deeper cuts to defence spending.
Higher taxes and a backlash
Tsipras faces a backlash from members of his own party for making too many concessions on pensions and other public spending. Any deal would still need to clear the Greek parliament and could be shot down among its most left-wing members.
His anti-austerity government has already abandoned some of its election promises like scrapping privatisation plans for ports and other state infrastructure.
Greek Finance Minister Yanis Varoufakis this morning said the country was headed into the “final stretch” of the talks ahead of meetings with creditors and EU finance ministers today.
We are entering the final stretch of negotiations – which we hope will be the last,” he said.
Yesterday Finance Minister Michael Noonan was accused of helping to “tighten the noose” around the neck of Greece in pressing for emergency support for the country’s ailing banks to be stopped.
- With AFP
First published 12.18pm
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