In a tit-for-tat series of rejections— what was seen as a hopeful step in the right direction just a mere 24-hours ago appears to be unraveling as Greece negotiates with creditors in Brussels.
Greek Prime Minister Alexis Tsipras presented a proposal to creditors over the weekend which was rejected by the EU-IMF creditors as too harsh on businesses.
The new plans submitted Sunday by Tsipras’s anti-austerity government aimed to raise €8 billion, mostly through new taxes on the wealthy and businesses, VAT increases and a cut in defense spending.
Creditors presented counter proposals which were flatly rejected by Greece.
In their counter-proposals, creditors called for early retirement to be abolished and an increase in the retirement age from 62 to 67 by 2022, not 2025.
They are sticking to demands for a 23% value added tax rate for restaurants, instead of the current 13%. Athens is fearful of the consequences to its valuable tourism sector.
Creditors also proposed to increase the level of corporation tax to 28%, instead of the Greek plan to raise it to 29% from 2016 onwards. The current level is 26%.
And they want defense expenditure to be slashed by €400 million instead of the proposed €200 million.
Tsipras fired back angrily with mentions of conspiracy theories that the EU-IMF were serving “specific interests”.
“This odd position maybe hides two things: either there is no interest in an agreement or they are serving specific interests in Greece. The repeated rejection of equivalent measures by certain institutions never occurred before – neither in Ireland nor Portugal,” he tweeted, referring to bailouts to those two countries.”
State Minister Alekos Flabouraris, considered close to Tsipras, told Syriza’s political committee that the revised list of demands was “absurd” while at least ten members of Parliament from Tsipras’ party openly stated they would not vote on the deal should Tsipras accept it.