He also noted that many of the various leaks concerning the contents of the proposal to Greece from the institutions belonged in the sphere of rumor. Schinas said that one needed to look at the overall picture and the essential issues, which were none other than certain gaps that remain and must be bridged through negotiations.
Juncker remains in constant communication with all the political officials involved in the negotiation in order to find a solution, he added. Eurozone sources, in statements after the Tsipras-Juncker meeting, said they were optimistic that a staff level agreement between Greece and the institutions "was just days away".
What the creditors propose
According to press reports, the proposal that was presented to Tsipras includes a number of “difficult” measures, such as the introduction of two VAT rates and simultaneous abolition of exemptions and discounts currently in place. Specifically, European sources argue that the VAT reform is key, at it believed that it will increase revenue on a permanent basis. According to this plan, there would be two rates; a low 11% and a higher 23%. The low rate would apply to medicine, books and food, while all other products and services will incur a 23% tax.
Furthermore, the creditors demand cuts worth 1.8 billion euros (1% of the Greek GDP) from the pension system. The creditors have also revised the primary surplus targets for Greece, with a 1% GDP goal for 2015, 2% in 2016, 3% in 2017 and 3.5% in 2018. Although these revised targets are significantly less than previously (3% in 2015 and 4.5% in 2016), they are still higher than what Athens had initially expected.
No debt relief
The Financial Times revealed that the proposal does not make any reference to any sort of debt relief. The IMF seems to doubt the Greek government’s ability to achieve these ambitious fiscal targets and is pressuring the Europeans to agree upon a restructure of the debt. The European Commission, however, disagrees with the IMF and as such, there is no such provision in the draft agreement.
Tsipras: Imposition of recessionary measures is unacceptable
Following his talks with Juncker and Eurogroup President Jeroen Dijsselbloem on Wednesday, Tsipras commented that the imposition of recessionary measures is unacceptable. He said that the Greek side submitted a “realistic and constructive proposal” and that the European Commission appeared to be willing to come to a realistic solution. Tsipras ruled out any recessionary measures, such as abolishing the social solidarity pension benefit (the so-called “EKAS”) or increasing the VAT on electricity.
Varoufakis says that solution will be found by end of June
Meanwhile, and while speaking to Parapolitika radio on Thursday, Finance Minister Yianis Varoufakis said that a solution will be found "before the end of the month." He added that as the negotiating process comes to an end, creditors adopt a stricter stance. When referring to the agreement, he spoke of a "complicated negotiation, beset by the creditors' internal disagreement, which will end on June 30," and added that "the creditors' internal disagreement is the only issue, otherwise the discussions are made in good and positive climate." He also categorically ruled out the possibility of introducing a single 23% VAT rate, when asked by journalists.
Ahead of the interview, and while being pressed by journalists outside the Ministry of Finance, Varoufakis refused to respond to the criticism he received from SYRIZA central committee member Yannis Milios, regarding his comments on accepting 70% of the bailout.
Delay in payments
Some reports claim that Milios has been very critical of Varoufakis, over his statement that 70% of the existing bailout program is acceptable, asserting that had this particular statement been made prior to the elections, SYRIZA would have come third. Milios, who delivered a speech at a conference in Thessaloniki earlier this week, said that Greece is going to have to pay 3.5 billion euros to the European Central Bank on June 22nd, and left it to be understood that this might be a problem. This is probably why he proposed a payment delay, claiming that the verbal assurances of receiving some funds, provided Greece first signs up to any agreement, are not enough. Milios said that a compromise, (where everything remains the same and everyone is meant to be happy because there will no immediate wage and pension cuts), is unacceptable.
Quite surprisingly he also said that the bank account deposit outflow could have been restricted, if a limit on daily cash withdrawals from ATMs had been introduced. He argued that a 300-euro limit, that covered the needs of 95% of Greeks, would be enough.
“Early elections are inevitable”
The news has not sat well with the radical left wing of the SYRIZA party. Vice President of Parliament Alexis Mitropoulos commented that early elections appear to be inevitable, following the meeting between Tsipras and Juncker. He told SKAI channel that the government basically has two choices, either it continues with deadlocked negotiations, or ask the people what to do. He made it clear that the dilemma is not the “euro or the drachma”, since that would be “a tragedy”, but that such a proposal will not be approved by SYRIZA’s Parliamentary Group. This is why he estimated that Tsipras will not propose it himself in Parliament.
He was not alone. SYRIZA’s parliamentary spokesperson Nikos Filis also told MEGA Channel that early elections are inevitable, should the creditors present Greece with an ultimatum. He said that if the government is pressured into signing an ultimatum, "it is clear that we will not sign it and ask the people to express their opinion”.
Earlier, he had argued that the government must prioritize wages and pensions over loan payments.
Likewise, SYRIZA MP Rachel Makri appeared on ANT1, where she openly supported the proposal made by Yannis Milios, to delay payments towards the International Monetary Fund. Makri underlined that Greek citizens "come first” and added that “if the extortion continues, there are other options” and that “the obligations we have towards the people are education, health care, pensions and wages”.
Hardouvelis mail was better, says Voutsis
When asked to comment on the agreement proposal that was presented to Tsipras, Minister of Interior Nikos Voutsis estimated that the “the Hardouvelis email was much less painful and ND leader Antonis Samaras did not bring it to Parliament”. Speaking on SKAI he said that he was optimistic arguing that the agreement proposal, which includes measures voted in by New Democracy, was an unacceptable starting point for the negotiations.
He too did not rule out the possibility of early elections and noted that they would be a democratic initiative to strengthen the mandate for a realistic agreement, rather than a rupture with Greece’s partners. According to him the differences between both sides are difficult to bridge.
SYRIZA set for problems with "internal opposition"
And if that wasn't enough, SYRIZA's Left Platform, otherwise known as its own ‘internal opposition’, issued a statement on iskra.gr, where it argued that the delays employed by the creditors aim to put the Greek economy in a choke hold. The article also disputes the intention of the creditors to actually reach an agreement with Greece.
Our opinion
Obviously the government is weighing the political cost of these measures because we do not want to believe that they are incapable of understanding the fatal consequences of a rupture with Europe. SYRIZA's largest voting pool is the Greek public sector and in our opinion it has won another victory because the proposal does not appear to include any redundancies, while the creditors also seem to have backed down on the deregulation of collective dismissals. The plan does, however require that the government commit to not abolishing any of the recent legislation regarding the job market.
So is this what they were negotiating all these months? Redundancies in the public sector? Again to the privileged few?
One of the Greek Left's greatest political achievements was passing off public sector reforms as "anti-populist" measures. Let us be clear, we are not referring to reforms that deal with wage and pension cuts, or any type of austerity measures (because we are against any more taxes) but we are rather referring to competency and excessive spending in the public sector.
(And because HellasFrappe does not like to generalize we are specifically referring to the elimination of public sector "benefits", a reduction in the number of civil servants, are in favor of a freeze on wage hikes and we are definitely in favor of less expenses in the public sector on the overall.).
Why would a small portion of this society (because the radical left is a very small percentage) be so schizophrenic to reforms? The answer is simple. There is no such thing as popular or unpopular measures, there are only reforms that benefit a section of society while the rest suffer. Those who are presently screaming at the top of their lungs to maintain the current status quo, and who are against any type of reforms, are the same group of people that have benefited from the state for decades now.
(Obviously we are referring to the majority of public servants, unionists and oligarchs of this country. And we are once again not referring to austerity measures but a clear clean-up of the public sector.)
Clearly when civil servants scream out for higher wages, or when private companies who worked with the public sector advocate for them, they are not talking about salary hikes that should be given to them because of their competency or productiveness, because that is indeed laughable, but they are clearly demanding benefits because they are only concentrated on their own pockets!
The unions are the other instrument that help them on this. They do nothing for the general working population and always work solely for civil workers. Have you ever seen them stage a protest for the 1.5 million Greeks who are currently unemployed in the private sector? Have you ever seen them bat an eye over the hundreds of thousands of family owned businesses that have closed over the past few years?
NO.
Yet when a decision is taken to fire or fine a civil servant for being incompetent and/or unproductive, or for whatever other reason, even major television channels advocate for him (or her) and slam the government that is ruling for being against the "will of the people".
(Oh brother!)
It is an age old battle and has been for eons in Greece (as it probably is all over the world). The privileged and the underprivileged. The great paradox, however, is that today those who the majority of Greeks regard as "privileged" are asking for even more!
Why do we say privileged: We say privileged because of their excessive salaries which have suffered little over the last few years. Those who scream out that their salaries were reduced are overstating things because the truth is that only their benefits were cut off, their wages more or less remained intact. Another reason why we say "privileged" is on account of their jobs; they don't have to worry about their performance, or about taking a sick leave, they will always have work, they are permanent workers! This is far from what is happening in the private sector where workers are struggling to find some sort of employment, to receive their hard earned wages which have been backed off for months, and who are always being weighed on their performance and competency. Let us not even touch on the subject of unemployed persons over the age of 35 -especially woman- because the numbers are staggering.
Never once do the privileged think about the other half because they really do not care.
We recently witnessed this in DEH (The Greek Power Company). They voted on wage and benefit hikes never once taking into consideration that this bill would be footed by all the Greek people. As of Wednesday night, and if this austerity measure passes, we will again be slammed with an even further hike on our electricity bills since our creditors want it to rise.
How much more can we pay? And for what?
These are the real problems that have brought Greece to its knees. A lack of actually evaluating performance has led to a public sector that acts more of a state within a state and is difficult to maintain economically. Yet this has not convinced the radical left that the only solution to this problem is to finally get rid of these privileges and this division in society.
Yes there are numbers involved, but reforms such as the above have nothing to do with austerity and yet these reforms were negotiated between the present government and our creditors? If this is true, then it is pitiful.
Why can't operate like every other Western society? Take Canada for instance. Opening a registered company takes less than a day and only costs $50 CAD. It creates jobs, gives people opportunities. Why do we need so many people stamping document after document in the public sector when computers were invented to make their jobs easier? Because computers collect data, and the state within the state will not be able to do as they please with public finances as well as with us the people (through the popular fakelaki).
Does the Left advocate for balance in society or not? Then they should put their money where their mouths are!
The reality, which some choose to ignore, is that Greece has been cut off from every source of funding, (yes privately owned companies, and little shops need money flows and funding to pay their workers). At present our economy is on a constant down turn, unemployment has not dropped and the black market is flourishing with young and foreign workers because they are willing to work for peanuts. People are that desperate!
Yet the public sector does not bat an eye to all this... It is always about their benefits and their privileges. What is worse, there are so many politicians who purposely ignore these realities and insist on playing Russian Roulette with the rest of us because they are afraid of their political fans.
ENOUGH
We agree on the idea of general elections, even though there are many conservatives that do not.
This drama must finally come to an end. It is high time that everyone rose up to the circumstances and lived up to their duties. Tsipras can be a great leader, but he must rid himself of his radical left platform.
Referneces: ANA-MPA, enikos, protothema, To Vima, ekathimerini, ANT1, SKAI, Defencenet
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