Angry Tsipras in deadlock with creditors

Both sides have remain deadlocked over compromise that would allow Athens to unlock €8bn in financial aid

Angry Tsipras in deadlock with creditors

World Bulletin / News Desk

Greek Prime Minister Alexis Tsipras wrestled with international creditors demanding sweeping changes to his proposed tax and reform plans on Wednesday in a last-minute race to clinch a deal to unlock aid and avert a debt default next week.

Sources close to the negotiations said the creditors had presented counter-proposals covering an array of differences on sensitive issues, just hours before euro zone finance ministers were due to convene (1700 GMT) to try to approve an agreement.

Before flying to Brussels, Tsipras attacked the position of "certain" creditors - a veiled swipe at the International Monetary Fund - as strange since he said they had rejected fiscal measures Athens put forward to plug a budget gap.

"This odd stance seems to indicate that either there is no interest in an agreement or that special interests are being backed," the leftist premier tweeted.

Financial markets reacted nervously, with investors rushing into safe-haven German bonds and the euro suffering a brief sell-off. European shares dropped and U.S. stocks opened lower.

European Union official insisted the talks had not broken down and said the exchange of different proposals was a normal part of the negotiation.

But because there is so little time left to reach a deal before Greece has to make a repayment to the IMF on June 30, the day its current bailout expires, the talks were particularly fraught.

If Greece misses that payment and is declared in default to the IMF, it could trigger a bank run, capital controls and an eventual Greek exit from the euro zone, showing that membership of the currency is not irrevocable as its founders proclaimed.

Economy Minister George Stathakis said only three of Athens' 50 proposals were still in dispute, but several sources familiar with the talks said there were many more gaps. The open issues included labour laws, collective bargaining, pension reform, public sector wages, opening up closed professions, investment as well as value-added tax and corporation tax.


"Of course we want changes and they don't, and this is part of the bargaining process, albeit less effective when done publicly," a senior official from one of the creditors said.

Several sources said International Monetary Fund chief Christine Lagarde was taking the hardest line against the Greek proposals on the table.

Tsipras met Commission President Jean-Claude Juncker and the heads of the IMF, the European Central Bank, the Eurogroup of finance ministers and the euro zone's rescue fund to try to bridge the gaps.

Looking tense, he was driven into Commission headquarters through an underground garage to avoid the usual arrival statements, and given only a perfunctory handshake by Juncker before plunging into the meeting.

Officials said the IMF was most concerned about the balance of the package, too heavily skewed towards tax increases that could further weaken the Greek economy and prove hard to collect, rather than structural reforms.

"If you ask the question 'Is this enough for the IMF to disburse?', I suspect it's not enough," one official said.

Güncelleme Tarihi: 24 Haziran 2015, 17:25