You are here

Greek PM attacks creditors as pressure builds for debt deal

Wednesday, June 17, 2015 - 07:21
LouisaGouliamaki170615.jpg
Greek Prime Minister Alexis Tsipras on Tuesday accused international creditors of trying to "humiliate" his country and called on Europe to reconsider its support for tough IMF reform proposals.

[ATHENS] Greek Prime Minister Alexis Tsipras on Tuesday accused international creditors of trying to "humiliate" his country and called on Europe to reconsider its support for tough IMF reform proposals.

"The fixation on cuts... is most likely part of a political plan... to humiliate an entire people that has suffered in the past five years through no fault of its own," Mr Tsipras told lawmakers from his radical left Syriza party.

"The time has come for the IMF's proposals to be judged in public...by Europe," the PM said, adding that the global lender bore "criminal responsibility" for austerity measures that plunged the country into a prolonged recession.

Mr Tsipras' outburst over the acrimonious talks with Greece's creditors came as Athens came under pressure to tone down its rhetoric and agree a debt deal with its EU-IMF creditors to avert default and possibly crashing out of the eurozone.

The tensions caused Athens stocks to shed 4.77 per cent Tuesday, closing at 703.05 points after losing nearly five per cent the previous day.

Alarmed by the deadlock, US Treasury Secretary Jacob Lew told Mr Tsipras in a phone call Tuesday that Athens should make "a serious move to reach a pragmatic compromise with its creditors".

Failing to agree new financing "would create immediate hardship for Greece and broad uncertainties for Europe and the global economy," Mr Lew warned, according to a statement issued by the Treasury.

The fraught negotiations between Athens and its creditors - the IMF, EU and the European Central Bank (ECB) - concern the release of the last 7.2 billion euros (S$10.9 billion) in rescue funds from Greece's massive bailout.

'TWO OR THREE GESTURES'

The embattled 40-year-old premier held talks with rival political leaders earlier Tuesday to seek support for a potential compromise, with just two weeks to go before the bailout expires.

Greece must also come up with 1.6 billion euros due to the IMF at the end of the month, with another 6.7 billion euros due to the ECB in July and August, which Greek officials have said the government cannot afford.

An opposition leader who met with Tsipras said the premier had cited "two or three gestures" that he could make to break the deadlock.

This had raised hopes that Athens was about to give ground, as EU leaders considered holding an emergency summit over the crisis.

But Mr Tsipras went back on the offensive, accusing the creditors of presenting proposals that merely pooled their toughest demands.

"Right now, what dominates is the IMF's harsh views on tough measures, and Europe's on denying any discussion over debt viability," he said.

Greece's Finance Minister Yanis Varoufakis also said Athens would not bring new reform measures to Luxembourg - where the eurozone's 19 finance ministers, who control the purse strings of the rescue programme, are meeting on Thursday.

"The Eurogroup is not the right place to present proposals which haven't been discussed and negotiated on a lower level before," Mr Varoufakis told Germany's mass-circulation daily Bild.

'EVERYTHING POSSIBLE MUST BE DONE'

Asked about the state of negotiations on Tuesday, German Chancellor Angela Merkel said there was "unfortunately very little that is new to report".

She reiterated that she aimed "to do everything in my power to keep Greece in the eurozone" and was looking ahead to Thursday's meeting of the eurozone finance ministers.

"But there can only be something decided there if there is a joint proposal of the three institutions with Greece. Whether that will succeed by Thursday I cannot say." French President Francois Hollande was cautiously optimistic, saying: "We are not far from a solution" while calling on Greece to make "alternative proposals".

He too said that "everything possible must be done" to keep the country in the eurozone.

The Syriza party was elected in January on pledges to ease the hardship caused by five years of austerity imposed in exchange for two international bailouts since 2010 totalling 240 billion euros (S$362.2 billion).

The government is resisting demands from the creditors to increase taxes and reform pensions, arguing that such measures have failed to revive the recession-hit Greek economy.

Greece is staggering under a debt mountain equivalent to nearly 180 per cent of GDP, or almost twice the nation's annual economic output.

The office of Greece's top negotiator, junior foreign minister Euclid Tsakalotos, said the creditors were pushing for pension cuts and additional measures to bridge a perceived fiscal gap of 2.5 per cent in 2016.

Greece says it has proposed measures sufficient to cover a 2.0 per cent fiscal gap, which the creditors dismiss as "uncertain".

Valdis Dombrovskis, the European Commission vice-president for the euro, said the creditors had shown "substantial flexibility".

"What is now really needed is political will from the Greek side to do a final effort to reach an agreement," Mr Dombrovskis said in Vilnius.

AFP