Greece handed new terms as Tsipras approaches decision time

[ATHENS] Greece's creditors handed the government revised terms for an agreement as Prime Minister Alexis Tsipras expressed incredulity that his own list of proposals to secure bailout funds had fallen short.

The overhauled set of measures was passed to the Greek government on Wednesday morning, according to a person familiar with the matter, who asked not to be identified because the negotiations are private.

The new terms come as Tsipras prepares for a Brussels meeting with the heads of the three creditor institutions - European Central Bank President Mario Draghi, International Monetary Fund Managing Director Christine Lagarde and European Commission President Jean-Claude Juncker. Finance Ministers will gather later on Wednesday to try and reach a deal before Greece's bailout expires and about 1.5 billion euros in payments come due to the IMF on June 30.

"There is still a lot of work to do," Dutch Finance Minister Jeroen Dijsselbloem, who chairs meetings of his euro- area counterparts, told reporters in Brussels. "We are not there yet."

The latest exchanges underscore the febrile nature of the negotiations as they enter the final hours before the country's bailout - and finances - run out. Greek markets dropped on Wednesday as Mr Tsipras took to Twitter to chide his country's creditors for not accepting a list of measures including tax increases and curbs on early retirement that he had submitted on Monday.

"The repeated rejection of equivalent measures by certain institutions never occurred before," Mr Tsipras said on his Twitter account. "This odd stance seems to indicate that either there is no interest in an agreement or that special interests are being backed."

Greek stocks and bonds fell as fresh cracks appeared between Greece and its creditors, paring strong gains from earlier this week. The Athens Stock Exchange index was trading 3.7 per cent lower at 2:40 pm in Athens while the yield on the 2-year government bond rose 66 basis points to 21.7 per cent.

The Greek proposals include steps to eliminate early retirement options, raise the sales tax, increase taxes that middle- and high-income earners pay and introduce a new levy for companies with annual net income of more than 500,000 euros.

The IMF doesn't accept tax measures for the wealthy and continues to insist on across-the-board taxes, Greek Labor Minister Panagiotis Skourletis said in an interview on state-run radio on Wednesday.

Ms Lagarde, who told IMF board members that she's optimistic a deal can be reached this week, views the proposed measures from Tsipras as too tilted toward increasing revenue, with the pension plan relying mostly on increased contributions, according to a person familiar with the matter.

While European policy makers had welcomed the Greek list as a basis for further talks, German Chancellor Angela Merkel stressed that creditors provided the blueprint for a deal based on a meeting she hosted in Berlin on June 1. Leaders are set to discuss Greece during a previously scheduled two-day European Union summit starting on Thursday.

"The starting point is this common position of the three institutions, which already contains some concessions to Greece compared with the original commitments in the second program," she said on Monday.

BLOOMBERG