Europe, IMF await new Greek concessions

Negotiations are expected to resume this weekend between Greece and its EU-IMF creditors seeking a deal on bailout funding for Athens, ahead of a crucial summit of eurozone leaders to avert a Greek default and likely euro exit.

European Union heads have called on Greece’s leftist government to present new reform and budget proposals, with Greek minister of state Alekos Flambouraris saying Saturday Athens could propose re-worked measures.

Speaking to television channel Mega, Flambouraris said several concessions were being examined, including stepped-up prohibition of early retirement schemes — something Athens has already accepted in principle — and lowering thresholds on which corporate profits are taxed.

Flambouraris said those and other compromises should bring Athens and its creditors — European Commission, International Monetary Fund and European Central Bank — closer to agreement on freeing up 7.2 billion euros ($8.1 billion) in blocked bailout funds Greece desperately needs to meet looming debt payments to the IMF and ECB.

By June 30 Athens has to honour an IMF payment of around 1.5 billion euros.

“We are going to present measures that bridge the gap,” Flambouraris was quoted as saying by Greek media, while also predicting Greece’s creditors won’t be satisfied with the gestures.

“You’ll see they won’t accept loosening budget (restrictions), or our proposal on the debt,” he said of two main sticking points in the talks.

Given the continued deadlock and ticking clock towards potential default, Flambouraris said a phone exchange between Greek Prime Minister Alexis Tsipras and European Commission president Jean-Claude Juncker could take place on Saturday.

The contact is one Athens’ concerned eurozone partners have been urging for several days. Worry about the continuing stalemate has been rising in other quarters, as well.

Given what he called the “critical” state of the situation, EU President Donald Tusk on Friday called on Greece to rapidly come to an agreement with its European and IMF creditors, or risk heading “straight into default.”

The White House also appealed for an urgent compromise to be struck, based on what it said must be “a programme of credible reform.”

Without such action, Greece appears likely to default on its June 30 debt payment, and with that risk a chaotic exit from the eurozone.

– ‘Deafening silence’ –

That prospect appeared to be fuelling the rising number of Greek savers withdrawing money from national banks. The increase forced the ECB on Friday to lift its emergency liquidity reserve available to Greek banks for the second time in a week.

Tsipras — who has never hidden his desire that an eventual accord be hashed out between political leaders rather than by negotiating teams of technical advisers — will find his European peers waiting expectantly for breakthrough proposals at Monday’s emergency summit in Brussels.

Yet following the failure of Thursday’s meeting of eurozone finance ministers, several European officials have warned the summit will likely be futile unless Greece presents proposals attentive to creditors’ demands.

“We need some kind of proposals on the table at the summit,” said Finnish finance minister Alexander Stubb.

German Chancellor Angela Merkel also issued a warning that the meeting will remain merely “consultative” without new Greek concessions allowing the “basis of an accord” to be reached.

By contrast, Athens — which says it has already made considerable sacrifices, and has presented a range of spending cuts, revenue hikes and structural reforms — has expressed its resentment over what it calls the lack of interest its partners have shown in Greek concession offers.

On Saturday, Greek Finance Minister Yanis Varoufakis said during Thursday’s eurozone meeting, “my presentation was met with deafening silence.”

“All the other speakers ignored our proposals and reiterated ministers’ frustration about the fact that Greece hadn’t… (made) any propositions,” Varoufakis wrote in an Irish Times opinion piece.