Greece’s Prime Minister Alexis Tsipras (L) is welcomed by European Commission President Jean-Claude Juncker (R) as eurozone finance ministers try to finalise a debt deal and avoid a default by Athens. Picture: AFP Source: AFP
GREECE has rejected “counter proposals” from creditors that were issued in response to Athens’ latest budgetary plan, in light of the IMF’s position, a government source says.
Questioned about whether “this counter proposal” — containing even bigger VAT tax hikes and public spending cutbacks — had been rejected by the radical left Greek government, the source replied: “Yes.”
Creditors are calling for early retirement to be abolished and an increase in the retirement age from 62 to 67 by 2022, and not 2025, according to plans published on a leftist website and confirmed by the source.
They are sticking to a demand for a rate of 23 per cent for VAT, or value-added tax, for restaurants, instead of 13 per cent at the moment. Athens is fearful over the impact on its valuable tourism sector.
Creditors also propose to increase the level of corporation tax to 28 per cent, instead of the Greek plan to raise it to 29 per cent from 2016 onwards. The current level is 26 per cent.
And they want defence expenditure to be slashed by 400 million euros ($577 million) instead of the proposed 200 million euros.
Creditors also seek the removal of special VAT rates for residents of the Aegean Islands.
Earlier on Wednesday, Greek Prime Minister Alexis Tsipras launched a scathing attack on the IMF for rejecting Greek reform proposals before arriving in Brussels, denting hopes of a final deal.
People power … A man waves a EU flag as pro-Euro protesters take part in a rally in front of the Parliament. Picture: Getty Source: Getty Images
The leftist leader hit out at the “strange position” of the creditors just minutes before going into an eleventh-hour meeting with key lenders including IMF chief Christine Lagarde and the European Union.
“This strange position maybe hides two things: either they do not want an agreement or they are serving specific interests in Greece,” Mr Tsipras said.
“The repeated rejection of equivalent measures by certain institutions never occurred before — neither in Ireland nor Portugal,” he tweeted, referring to previous bailouts in those two countries.
The EU-IMF creditors were due to present Mr Tsipras with their own “common position” in response to the last-ditch list of reform proposals submitted by Athens on Sunday, sources said.
The Greek plans aimed to raise some VAT rates and hike business taxes, increase employee and employer pension contributions, and narrow the country’s budgetary gap.
Rising up … A pensioner holds a flag bearing the picture of Argentinian revolutionary Ernesto “Che” Guevara during an anti-austerity protest in Athens. Picture: AP Source: AP
source:news.com.au
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