You are here

Talks on Greece ended in stalemate

04/06/2015 06:52
Talks between Greece and the institutions in relation to the Greek program failed to break the impasse as the lenders through the European Commission President Jean-Claude Juncker insist on filing difficult measures which cannot be accepted by the Greek government.

The effort in the five-hour meeting last night between Juncker and Tsipras to find a right balance was not fruitful.

As leaked in Brussels, but also based on the statements of the Greek prime minister, after the long meeting between Juncker - Tsipras, the President of the European Commission presented a hard line, which may lead negotiations, as highlighted, to a dangerous outcome.

In a written statement after the meeting, Juncker said that the meeting was constructive and talks will continue in the coming days.

He noted that “progress was made in understanding each other’s positions on the basis of various proposals.”

The Greek prime minister rejected measures with a recessionary character demanded by the institutions, such as the cut of income of low pensioners (EKAS) and the VAT increase on electricity, stressing that discussions continue in order to “come up with a realistic agreement”.

Tsipras separated twice the role of the European Commission, highlighting its positive contribution to the negotiation, unlike IMF's intransigence.

Referring to the payment of the tranche to the IMF which is due Friday, the Greek PM said “don’t worry”.

Specifically, A. Tsipras’ announcement reads as follows:

"We had a friendly and constructive discussion with President Juncker, and later with his staff. Jeroen Dijsselbloem joined us later.

The conclusion of this discussion is that the proposal that the Greek side has submitted remains the only realistic and constructive proposal on the table. Of course from the proposals that we heard on the part of the three institutions, I want to keep as a basis for discussion, the low, lower than the previous programs, surpluses. And of course there are many more points in common. But there are also points that no one could approach because everyone should know that we are talking about a country that in the past five years has undergone a major economic catastrophe, we lost 25% of GDP from five years of austerity.

So suggestions that bring back on the table ideas such as to cut the EKAS of low-pensioners, or increase VAT on electricity by 10% are of course, suggestions which cannot have any basis for discussion. Nevertheless there was a constructive spirit on the part of the European Commission to reach a common ground.

The proposals that the Greek Government has submitted, constitute the common ground so far. Discussions will continue and I think that what is positive for today is the proof, at least on the side of the Commission - our interlocutors, that is - that there is the mood so that very soon we will come to a realistic agreement. And, I repeat, that the realistic basis of discussion remains the proposal of the Greek side.

Discussions will continue in the coming period, in the coming days, and I can say that as long as someone is discussing frankly the closer he is to reach a mutually acceptable solution."

Meanwhile, the climate in the government is extremely heavy and the view that proposals such as those made to the prime minister will not be accepted, is expressed.

Earlier, after a telephone conversation of the prime minister with the German Chancellor, Angela Merkel and the French President Francois Hollande, it leaked that primary surpluses in the agreement for the coming years will be low. This is the only field of full convergence of views between Greece and the institutions.

What do lenders want?

Before the meeting a Wall Street Journal report said that the proposal of the lenders after the mini-summit in Berlin Monday, provides for a reduction in spending for pensions by 0.25-0.5% of GDP this year and by 1% of GDP in 2016.

Regarding the fiscal aspect, the proposal provides for primary surplus of 1% of GDP in 2015, 2% in 2016, 3% in 2017 and 3.5% in 2018. These figures are clearly lower than those given in the current Greek program, but higher than those Athens wishes (0.8% this year and 1.5% of GDP in 2016), WSJ noted.

The report also talked about small concessions to labour market reforms.