Leaders push for deal as creditors await revised Greek proposals
Representatives of Greece’s creditors were on Monday awaiting revised proposals from Athens as international pressure mounted for a reform deal, with US President Barack Obama and German Chancellor Angela Merkel pushing for swift action to clinch an agreement.
In comments at the end of a G7 summit in Germany, Obama referred to a “sense of urgency” to break the deadlock. “What it’s going to require is Greece being serious about making some important reforms,” he said. He added that Greeks will “have to make some tough political choices that will be good for the long term.”
Merkel focused on the ticking clock. “There’s not much time left,” she said. “We have to work very hard on this.”
Greece was expected to submit an updated version of its proposed reforms late on Monday night. A delegation of Greek officials, including the negotiations coordinator Euclid Tsakalotos and State Minister Nikos Pappas, were in Brussels on Monday in a bid to “investigate the scope for convergence” with creditors and to negotiate possible changes to the proposals submitted by Athens last week, government spokesman Gavriil Sakellaridis told reporters.
Greece’s new proposal is expected to come under scrutiny from European officials on Tuesday. According to sources, Athens has adopted some of the fiscal measures proposed by creditors and has amended its proposal on value-added tax reform, insisting on three rates, but increasing them to 7, 12 and 23 percent. As regards the issue of the primary surplus, Athens is willing to shift closer to the creditors’ proposed target of 1 percent from its goal of 0.6 percent, sources said. Athens is also said to have sought alternative measures to avoid raising VAT on the islands. Another possible measure is increasing pensioners’ contributions to healthcare from 4 percent to 6 percent of their monthly payments.
It remained unclear whether creditors would be convinced by the new proposals, particularly as the recent behavior of government officials has annoyed them. The failure of Prime Minister Alexis Tsipras to inform creditors about Greece’s decision to bundle this month’s repayments to the International Monetary Fund, the government’s denial that he telephoned European Commission President Jean-Claude Juncker over the weekend and the premier’s only partial presentation of the creditors’ proposals during a speech in Parliament last Friday appear to have eroded trust in Brussels.
Tsipras is supposed to meet with Merkel and French President Francois Hollande on the sidelines of a summit in Brussels on Wednesday. But whether the three will finally meet or not is expected to depend largely on progress in negotiations.
The distance between the two sides was clear following a meeting between Greek Finance Minister Yanis Varoufakis and his German counterpart Wolfgang Schaeuble in Berlin. The two men agreed that a deal is necessary but, according to sources, disagreed on virtually all the aspects that it should comprise.
Meanwhile, speculation continued about a possible extension to Greece’s bailout. Responding to reporters’ questions, Sakellaridis did not rule out such a possibility, saying all options are open and being discussed, but indicated that the government’s priority is to secure a “medium-term solution to the financing issue.”
