Monday

4th Jul 2022

Greece says creditors’ demands 'absurd'

  • Varoufakis said Greece has 'bent over backwards' to stay in the euro (Photo: The Council of the European Union)

Greek finance minister Yannis Varoufakis told Irish radio on Friday (26 June) morning that creditors’ ideas for deeper pension cuts are “absurd”.

“We have 1 million families, where the whole family, parents, grandparents, grandchildren, are living off the single pension of one grandparent. To suggest it would be preferable to reduce that single pension is utterly absurd and it’s a position I’m simply not prepared to put to my parliament.”

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With creditors’ and Greek proposals flying back and forth in multiple meetings in recent days, he accused the creditors - the European Commission, the European Central Bank, and the International Monetary Fund - of keeping euro states “in the dark”.

The Irish leader, Enda Kenny, and finance minister, Michael Noonan, had criticised Greece for being unwilling to accept austerity, as Ireland did before it got out of its bailout.

But Varoufakis said “they’d have a different view” if they knew what was really happening in the talks.

He described Greece as having absorbed a “gargantuan dose of austerity”, noting that pensions have already been slashed by 49 percent and public sector wages by 38 percent.

The Greek talks are set to continue in a euro-ministers’ meeting in Brussels on Saturday.

If things go well, the German and Greek parliaments could ratify a deal on Monday, avoiding a Greek default on Tuesday, when its bailout programme ends and when it’s due to repay €1.6 billion to the IMF.

“An agreement is still possible at the weekend”, the Lithuanian leader, Dalia Grybauskaite, whose country adopted the euro in 2015, told press on Friday morning.

She said “it isn’t good” to speak publicly about a plan B, or, how to manage a Greek default, at this time.

But on Thursday evening, leaders made it clear that Saturday is the last chance for a deal. Dutch PM Mark Rutte said that failure to reach agreement would mean eurozone leaders would be forced to think of next steps.

Germany's EU commissioner Gunther Oettinger also said, on Friday, that a Greek exit from the eurozone is unavoidable if no breakthrough is found in the coming days.

"The Grexit is no goal for us, but it would be inevitable if we don't find a solution over the next five days", he told Deutschlandfunk radio.

Meanwhile, Greek daily Kathimerini on Friday published a leaked version of the latest Greek proposal.

The nine-page paper proposes: €200 million in military spending cuts; increasing VAT revenue from 0.74 percent of GDP/year to 0.93 percent; and raising the retirement age to 67 by 2022.

Creditors have asked for double the cut in military funds and 1 percent of VAT, among other disagreements.

Greek talks postponed to Saturday

Eurozone finance ministers will meet for the fifth time in 10 days on Saturday after the latest talks aimed at sealing a Greek debt deal were hastily aborted on Thursday.

Greece meeting kicks off with EU in 'uncharted waters'

A Eurozone meeting on Greece Saturday kicked off with a sense of disarray as euro finance ministers expressed surprise by Athens' referendum decision, and admitted they were unsure what was going to happen next.

Tsipras calls shock referendum

Greece will hold a referendum next Sunday on whether to accept its latest bailout offer, prime minister Alexis Tsipras has stated.

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