The Greek delegation walked out the negotiations with creditors representatives in Brussels on Sunday afternoon. During the meeting that lasted 46 minutes, the Greek side submitted revised proposals but they were considered as “insufficient” by the creditors.
A difference gap of 2.6 billion euro remain between the two sides. According to a statement issued by the European Commission, the creditors do not want tax hikes but permanent expenditure cuts and thus of €2 billion per year.
Greek negotiator Yannis Dragasakis who is also Deputy Prime Minister told media that the institutions did not respond in way or with authorization that would allow unresolved issues to be settled. He added that the lenders representatives had said that they were not authorized to switch fiscal measures into structural reforms. He said that Greece had submitted proposals on Sunday and that these proposals were covering the fiscal gap as demanded.
Dragasakis added that the IMF and the EU still wanted Greece to cut pensions of 1% of GDP and Value Added Tax hikes. Athens has vehemently rejected further cuts in pensions.
Citing Greek government sources, Channel 4 reporter Paul Mason, tweeted on the reaons the Greek negotiators left:
“Greek negotiators left because they were told that negotiations were over.”
” Greeks were told officials (Juncker chef de cabinet and Thomson’s deputy) didn’t have mandate to make any concessions on fiscal gap.”
“My snap take on Brussels talks breakdown. Greeks did offer to do 2% of fiscal austerity, which they had not done before. EU wants 0.6% more.”
“Holland/Merkel told us to go to institutions and do deal, institutions told us no more negotiations.”
It is not the first time the talks break down. Last Thursday, it was the IMF that left negotiations, today it was Greece.
So now what?
A European Commission spokesman said: “President [Jean-Claude] Juncker remains convinced that with stronger reform efforts on the Greek side and political will on all sides, a solution can still be found before the end of the month.”
The Eurogroup scheduled to convene on June 19th is reportedly to take up the Greek issue.
According to Greek media citing the EC statement, “Juncker had given Greece a deadline to give a respond about the creditors’ demands by next Thursday, the Eurogroup meeting day.”