New round of talks in Brussels after brief inconclusive Eurogroup

Prime Minister Alexis Tsipras was due to be locked in talks on Wednesday night with key European officials after Greece’s lenders submitted new proposals for measures to unlock 7.2 billion euros in bailout funds that Athens dismissed as being unacceptable.

Tsipras, accompanied by State Minister Nikos Pappas and Alternate Minister for International Economic Relations Euclid Tsakalotos, held talks for several hours with European Commission President Jean-Claude Juncker, European Central Bank President Mario Draghi and International Monetary Fund Managing Director Christine Lagarde after lenders demanded the Greek government adopt more spending cuts than it had proposed.

This meeting was followed by a brief Eurogroup meeting, where finance ministers were not able to take any decisions as the previous talks had not arrived at a conclusion. A decision was reached for the ministers to reconvene at 1 p.m. in Brussels on Thursday, by which time they hope to have a document that they can assess.

“We will work through the night if we have to,” said Eurogroup chief Jeroen Dijsselbloem, who was also due to take part in Wednesday night’s talks along with European Economic Affairs Commissioner Pierre Moscovici and European Stability Mechanism chief Klaus Regling.

A government official said Greece’s delegation had expected talks in Brussels on Wednesday to focus on Greek proposals that “the institutions had accepted as a basis for discussion on Monday.” However, the creditors submitted their own proposal, “which transfers the burden to salaried workers and pensioners in a way that is socially unfair while also proposing measures to avoid increasing the burden on the privileged,” the official said.

“The Greek side is unable to go in such a direction,” the official added, noting that “negotiations are continuing at all levels.”

The creditors’ latest demands include that Greece raise revenue to the tune of 1 percent of gross domestic product from reforms to the value-added tax system, as compared to 0.74 percent of GDP as proposed by Greece. Overhauls proposed by creditors would lead to the VAT on cafes and restaurants increasing to 23 percent from the current 13 percent. The VAT on basic supermarket staples such as pasta and rice would increase to 23 percent. Creditors also want Greece to gradually phase out the low-level pension benefit known as EKAS.