Greek Left Attack Creditors as Tsipras Close to Agreement

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” and that Athens would make a crucial payment due to the International Monetary Fund on Friday.

But he rejected pension cuts and a tax rise on electricity that he said European and IMF creditors were demanding along with other conditions to win the release frozen loans and avert a default that could hit euro zone 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 labor reforms — demands that would cross the ruling Syriza party’s declared red lines.

The lenders were demanding that Greece reduce spending on pensions by 1 percentage point of gross domestic product and raise a further 1 percent or 1.8 billion euros ($2 billion) by increasing value-added tax on products ranging from drugs to electricity, the sources told Reuters.

European Commission President Jean-Claude Juncker, who put the proposal to Tsipras at a late-night dinner along with the chairman of euro zone 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.

via Reuters

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza