Government officials on Monday resumed negotiations with representatives of the country’s international creditors with the aim of reaching an agreement by Wednesday, though sources in the prime minister's office on Tuesday suggested that a meeting of eurozone finance ministers is unlikely before the Greek Orthodox Easter break.
The negotiations are centered on a barrage of new austerity measures worth some 5.4 billion euros, chiefly pension cuts and an income tax overhaul, as well as an additional bundle of 3.6 billion euros in “contingency measures.”
A well-informed source in Brussels indicated on Monday that an emergency summit of eurozone finance ministers could be called for Thursday if Greece and its creditors manage to agree by then both on the 5.4 billion euros of cuts and the additional contingency measures which the International Monetary Fund wants approved, though sources in Athens later indicated this may not be possible.
Although Finance Minister Euclid Tsakalotos has countered that Greek law does not permit the legislation of contingent measures, he and eurozone officials have indicated that attempts are being made to clear that hurdle.
Athens is keen to ensure that the contingency measures are as vague as possible as the IMF is said to be pressing for further cuts to civil servants’ salaries and pensions and new increases in value-added tax rates which would be politically toxic for the government of Prime Minister Alexis Tsipras.
As for the 5.4-billion-euro package of measures, the two sides were said to have been very close to an agreement last Thursday just before the submission in Parliament of two bills – one on a pension system overhaul and the other on a new income tax scale. As regards pensions, the two sides must still agree on the source of 70 million euros in cuts, a relatively small sum. Meanwhile, Greek officials are proposing that the tax-free threshold for those on low incomes be lower for those with large families.
Opposition to the measures being discussed is strong, with civil servants and journalists among those staging walkouts in protest.