Greece on edge as EU exit looms

Brussels 

Greek Prime Minister Alexis Tsipras lashed out at his country’s creditors ahead of critical talks in Brussels Wednesday, denting hopes of a final deal to prevent Athens from defaulting and leaving the euro.

The anti-austerity leader flew in for a crunch meeting with the heads of the European Commission, International Monetary Fund and European Central Bank before eurozone finance ministers try to thrash out an agreement.

But Athens said it had rejected last-minute changes made by its EU-IMF creditors to an eleventh-hour reform plan submitted by Greece this week to win approval for vital bailout funds.

Hardline Germany said there was a long way to go before any deal, while eurozone stocks closed down over doubts that an accord will be ready for European Union leaders to rubber-stamp at a summit on Thursday.

“This strange position maybe hides two things: either they do not want an agreement or they are serving specific interests in Greece,” Tsipras said just minutes before the talks.

“The repeated rejection of equivalent measures by certain institutions never occurred before -- neither in Ireland nor Portugal,” he tweeted, referring to bailouts to those two countries.

Officials said the Tsipras talks in Brussels, which were still going on after nearly six hours, were “difficult” and “hard”. The eurozone ministers’ meeting could last all night, sources added.

Time running out 

Greece and its creditors have been locked in a stand-off since the radical left Syriza party was elected in January, with the EU-IMF demanding reforms before unlocking the last 7.2 billion euros ($8.1bn) of Greece’s bailout before it expires on June 30.

But time is running desperately short for Greece, which is set to default on a 1.5bn euro IMF loan repayment also due at the end of the month if it does not get fresh funds within days.

EU President Donald Tusk warned last week of the risk of a “chaotic uncontrollable Grexident” -- Greece crashing out of the 19-country single currency and possibly even the 28-nation European Union.

The new plans submitted Sunday by Tsipras’s anti-austerity government aim to raise eight billion euros, mostly through new taxes on the wealthy and businesses, VAT increases and a cut in defence spending.

But in their counter-proposals, creditors are calling for early retirement to be abolished and an increase in the retirement age from 62 to 67 by 2022, not 2025.

They are sticking to demands for a 23pc value-added tax rate for restaurants, instead of the current 13pc. Athens is fearful of the consequences to its valuable tourism sector.

Creditors also propose to increase the level of corporation tax to 28pc, instead of the Greek plan to raise it to 29pc from 2016 onwards. The current level is 26pc.

And they want defence expenditure to be slashed by 400 million euros instead of the proposed 200m euros.