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EU/IMF lenders demand asset sales, pension cuts in Greek proposal

[ATHENS] Greece's EU/IMF lenders have asked Athens to commit to selling off state assets, implement pension cuts and maintain unpopular labour reforms, sources familiar with their proposal said on Thursday, demands that would cross the government's so-called red lines.

In a five-page proposal presented to Greek Prime Alexis Tsipras in Brussels on Wednesday, EU/IMF lenders asked Athens to reduce spending on pensions by 1 per cent of gross domestic product, the sources said. They also demand Athens raise 1.8 billion euros - or 1 per cent of GDP - by increasing value-added tax to 11 and 23 per cent for products ranging from drugs to electricity, the sources told Reuters.

They also want Greece to scrap a benefit for low income pensioners, called EKAS, to save 800 million euros by 2016 - a move that if accepted, would force Tsipras to violate his pledge to avoid any new pension cuts. The proposal also calls for a hike in healthcare contributions by Greeks.

The proposal also asks Athens to commit to privatising Grid operator ADMIE, Greece's major ports in Piraeus and Thessaloniki, the former airport complex of Hellenikon, Hellenic Petroleum and Greek telecoms operator OTE in exchange for bailout aid.

Some of the asset sales mentioned - like ADMIE and Hellenikon - have been staunchly opposed by parts of Tsipras's Syriza party.