CCN.LA reported on Monday about the 11th hour Eurozone emergency summit seeking a deal to prevent Greece from defaulting on her debt and toppling the area into an economic tailspin. But the European Central Bank, the International Monetary Fund and the European Commission, Greece’s main creditors, are using the situation to push Greece and her citizens further into an economic corner.
Greek Prime Minister Alexis Tsipras said in a tweet, this morning, that some creditors have not accepted Greece’s proposals of reform-for-aid as he left for emergency talks in Brussels.
The insistence of certain institutions of not accepting parametric measures has never happened before – not in Ireland, nor in Portugal.
– Greek Prime Minister Alexis Tsipras
Tsipras will meet with the heads of three creditor institutions on Wednesday. Greece is terminally indebted to the European Central Bank, the International Monetary Fund and the European Commission. The emergency talks will, once again, attempt to reach an agreement before the IMF’s deadline on 30 June for payment of €1.6 bil ($1.8 bil).
The deal is being compromised by a standoff over debt relief, said Greek Economy Minister George Stathakis to Reuters.
Failure to make payment of €1.6 bil to the IMF on 30 June will put Greece in default of international debt but George Stathakis says that he is confident a deal will be struck prior to the reconvening of European Union leaders on Thursday 25 June.
The situation has markets nervous and the German DAX started selling off at the start of the day, prior to any comments by Tsipras:
Creditors (IMF, ECB and EC) demand that Greece increases taxes, lower pensions and raise retirement age to 67. Some of Greece’s island destinations enjoy concessions on value-added-tax to encourage tourism but one of the creditors demands is that the main VAT rate be raised to 23 percent and imposed indiscriminately across all of of Greece.
Citizens have already withdrawn €4.2 billion from Greek bank accounts and it is feared that a default will see the imposition of capital controls to prevent a run on the country’s banks who are being heavily subsidized by the ECB to provide cash liquidity.
In 2013 many Cypriot citizens expatriated their bank savings via the Bitcoin network amid similar conditions.
Various street protests in Athens this week attest to public opposition to more spending cuts and austerity.
There are four people in my household, and we are living on 600 euros a month. Where else does that happen?
– 59-year-old Antonia Methoniou
Image from Wikimedia.
Chart from TradingView.