Greece 'Shoved Over Red Line' as IMF Pushes Even Harsher Cuts

Syriza leader accuses European lenders of capitulating to "special interests" with unreasonable demands

Supporters rallied in London's Trafalgar Square on Tuesday evening, calling on European lenders to cancel Greek's debt. (Photo: Global Justice Now)

More austerity, more cuts, or no deal.

That's the message the International Monetary Fund threw back at the Greek government after negotiators on Wednesday rejected the latest reform proposals submitted by the Syriza government.

According to reporting on the ground, there were a "flurry of proposals, counter-proposals, leaks and verbal attacks" in Brussels as Greek Prime Minister Alexis Tsipras continued to try to hash out an acceptable bail-out plan with his creditors ahead of a critical June 30 payment deadline.

Though Syriza supporters and those within the leftist government say that Greece's most recent offer is too austere and abandons pledges made during the election campaign, European creditors still rejected the deal. Instead, the IMF submitted a list of counter-reforms which Greek negotiators described as "absurd" and "not acceptable."

We Interrupt This Article with an Urgent Message!

Common Dreams is a not-for-profit news service. All of our content is free to you - no subscriptions; no ads. We are funded by donations from our readers.

Our critical Mid-Year fundraiser is going very slowly - only 993 readers have contributed so far. We must meet our goal before we can end this fundraising campaign and get back to focusing on what we do best.
If you support Common Dreams and you want us to survive, we need you now.
Please make a tax-deductible gift to our Mid-Year Fundraiser now!

On Monday, the Greek government submitted an offer that would raise the country's VAT (Value-Added Tax) and slash the country's pension system, gradually raising the retirement age to 67.

Following the bank's rejection of that offer, Tsipras accused the lenders of suspiciously holding the country to a different standard than other indebted nations.

"The repeated rejection of equivalent measures by certain institutions never occurred before-neither in Ireland nor Portugal," he wrote on Twitter. "This odd stance seems to indicate that either there is no interest in an agreement or that special interests are being backed."

The IMF's counter proposal, which was leaked Wednesday, showed that the Greek government "has been pushed to raise more from VAT and also make sweeping changes to its pensions system, including raising the retirement age faster and eliminating benefits for the poorest pensioners," the Guardian reports.

BBC economics correspondent Duncan Weldon summarized the two drafts in a Tweet, noting their different approach to so-called "red-line" deal-breakers:

Across Europe this week, anti-austerity activists and other supporters are holding a week of rallies in vigils in solidarity with Greece as it faces off with Europe's financial elite. Campaigners have also launched a petition calling on creditors to cancel Greece's debt and discontinue the punishing austerity agenda.

If a deal is not reached and creditors refuse to release bail-out funds by the end of the month, Greece risks defaulting on its debts, possibly spurring an exit from the European Union.

The Guardian is hosting a live blog as Eurogroup finance ministers meet in Belgium Wednesday evening to continue discussions.

Join Us: News for people demanding a better world

Common Dreams is powered by optimists who believe in the power of informed and engaged citizens to ignite and enact change to make the world a better place.

We're hundreds of thousands strong, but every single supporter makes the difference.

Your contribution supports this bold media model—free, independent, and dedicated to reporting the facts every day. Stand with us in the fight for economic equality, social justice, human rights, and a more sustainable future. As a people-powered nonprofit news outlet, we cover the issues the corporate media never will. Join with us today!

Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.