BRUSSELS (AP) — Greece was trying to bridge major differences with creditors Wednesday on a plan to make more reforms in the country in exchange for bailout loans it needs to avoid a potentially disastrous default next week.
Leftwing Prime Minister Alexis Tsipras criticized the International Monetary Fund as being needlessly picky about the reforms Greece had proposed, which consisted largely of tax increases.
A Greek official confirmed the IMF was focusing on toning down the tax increases, saying they can hurt businesses. The official, who asked not to be identified because the talks were ongoing, said creditors are demanding, among other things, a freeze on pensions, scrapping some proposed taxes and surcharges on business, and higher sales tax on some goods.
“These are very tough negotiations,” the Greek official said. “But there is a common will to get somewhere.”
Tsipras said that as long as Athens delivered the right amount of savings, the IMF should have no say in what specific policies a sovereign country adopts.
“This odd stance seems to indicate that either there is no interest in an agreement or that special interests are being backed,” Tspiras wrote on his official Twitter account.
The latest disagreement weighed on the Athens Stock Exchange, which dropped 1.8 percent after huge gains the previous two days. Government bond yields in Greece, Spain and Portugal rose, an indication of investor concern.
Tsipras came to EU headquarters early to meet with the heads of the European Commission, the IMF and the European Central Bank to hopefully clinch a deal before a European Union summit opens late Thursday. The finance ministers of the 19 nations that use the euro are expected to work deep into the night to finalize the details of any deal that the leaders can then approve at their summit.
Greece has a 1.6 billion euro ($1.8 billion) debt to pay on Tuesday which it cannot afford unless the creditors unfreeze 7.2 billion euros (8.1 billion dollars) in bailout money.
Despite the lingering disagreements with the IMF and several EU officials, Greek Economy Minister Giorgos Stathakis said he was confident an agreement could be finalized within the day.
“The details are what’s left — a small gap,” he told private Mega Television. “It’ll be over today.”
Elected on an anti-bailout platform in January, Tsipras’ left-wing Syriza party had promised to scrap all austerity measures and demand forgiveness on a chunk of the country’s bailout debt. Tsipras has had to backtrack partly on those pledges and now could have trouble persuading party lawmakers to back a new deal, which would have to be approved by Monday night.
Athens was forced into concessions by a punishing debt repayment schedule and an economy hammered by uncertainty: A return to mild recession, ratings downgrades and dramatic outflow of bank deposits that threatened to crash the country’s financial system.
Stathakis insisted that the concessions were mutual.
He said Greece had convinced creditors to lower their demands for a primary surplus — the surplus when not counting interest payments on debt. As a result, that should help the Greek economy grow between 1 percent and 1.5 percent this year.
Stathakis was also upbeat about confidence returning in the country. The European Central Bank has had to increase the amount of emergency credit that Greek banks can draw on every working day since Friday. The credit is needed to help the banks cope with deposit outflows.
“Bank deposits will return,” Stathakis said. “This time the money taken out, compared to 2012, is being kept at (home) and not sent abroad.” He said of Greece’s proposed reforms that they are “the most balanced agreement that is possible under the circumstances.”
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Raf Casert contributed from Brussels.
