Greece’s hopes of staying in the eurozone appeared to be dwindling ahead of an EU summit in Brussels on Wednesday, with Greek Prime Minister Alexis Tsipras lashing out at his country’s creditors, and attitudes hardening amongst the rest of the EU.
Mr Tsipras raised the stakes as he arrived in Brussels on Wednesday for talks with Greece’s creditors – the European Commission, the European Central Bank (ECB), and the International Monetary Fund (IMF) – denouncing their “strange stance” over his reform plans. “This odd stance seems to indicate that either there is no interest in an agreement or that special interests are being backed,” he tweeted.
Mr Tsipras insisted Greece’s planned reforms were being treated unfairly compared to those of other troubled euro members, tweeting: “The repeated rejection of equivalent measures by certain institutions never occurred before – neither in Ireland nor Portugal.”
The repeated rejection of equivalent measures by certain institutions never occurred before-neither in Ireland nor Portugal. #Greece (1/2)— Alexis Tsipras (@tsipras_eu) June 24, 2015
This odd stance seems to indicate that either there is no interest in an agreement or that special interests are being backed. #Greece (2/2)— Alexis Tsipras (@tsipras_eu) June 24, 2015
However, his defiance ahead of the crunch summit only served to underline how far apart the two sides were over the details of a potential new bailout deal.
An emergency summit of Eurogroup leaders in Brussels on Monday brought renewed optimism about a deal, as Greece offered more cuts to pensions and higher taxes. But in the two days since, Mr Tsipras has been accused of backtracking on his pledges.
The creditors say they want to wrap up a deal releasing further loans before Tuesday night, the deadline for Athens to repay a €1.6 billion debt to the IMF or risk default. But they say they have been frustrated by the Greek government’s failure to produce meaningful reforms in exchange for the loans.
PM on IMF "technical staff" (Thomsen) rejection of Greek equivalent measures: They either do not want a deal or serve specific interests”— Dimitris Yannopoulos (@DimitrisY) June 24, 2015
Yet officials in Brussels warned that the Greek proposals failed to address their key demands to cut government spending. IMF head Christine Lagarde, who joined the meeting in Brussels with Mr Tsipras, was said to have been particularly scathing about the Greek proposals, saying they relied too heavily on tax hikes, and did not go far enough in reducing government bureaucracy.
The two sides were at an impasse yesterday, with a feeling among the Greeks that they have made enough concessions already. Whatever deal Mr Tsipras comes back with at this point, it will be a hard sell to his own MPs and coalition partners.
Greece’s right wing junior coalition partner said the creditors’ counter-proposal could force the country to head to the polls.
“We are fighting to stay in Europe. But if we’re presented with a very onerous agreement, like the counterproposals of the creditors, then we’ll be forced to resort to the will of the people again,” Greek MP Marina Chrysoveloni told The Independent.
"The people have given us a very specific mandate, so if what we’re presented with isn’t compatible with the mandate the people gave us, then we’ll have to resort to elections again.”
George Stathakis, Greek minister for the economy, said only three of Athens' 50 proposals were still in dispute, but several sources familiar with the talks said there were many more gaps.
Greece's creditors' counter-proposals were leaked by the Wall Street Journal on Wednesday.
Wednesday's summit comes as ECB has had to progressively raise the levels of emergency credit that Greek banks can draw on, to cope with rising deposit outflows.
Mr Tspiras met his creditors before the finance ministers of the 19 nations that use the euro began a late session in Brussels aimed at thrashing out a deal ahead of the summit. Eurozone officials have warned that even if the leaders agree a deal at the summit, there might not be enough time for national parliaments to confirm an extension of Greece’s current debt programme before it is due to expire on Tuesday.