Greece Told To Have A Proposal For More Welfare Cuts Ready Before Monday Meeting; Tsipras Submits Revised Plan With No Pension Cuts At All.
According to the Financial Times website, before the Greek cabinet meeting on Sunday to consider compromise proposals on further austerity measures, François Hollande and Angela Merkel both telephoned Greek Prime Minister Alexis Tsipras to remind him he needed a staff level agreement with the European Commission, IMF and ECB ahead of the summit.
As a result, the Greek cabinet met yesterday (Sunday) at Tsipras official residence to thrash out a governments strategy that would enable Mr Tsipras to bridge his two seemingly irreconcilable electoral mandates: to end austerity and block further cuts in spending while also satisfying creditors demands for reform to keep Greece in the Eurozone.
And while the Greek negotiating position is one where acceptance of any further spending cuts will be seen as a defeat for Tsipras, the Minister of State Nikos Pappas used an interview with the countrys Ethnos newspaper to reiterate the governments firm opposition to cuts to pension plans or wages. – Earlier this morning we learned from Reuters news feed that Tsipras had presented Greece’s proposal for a deal during phone talks on Sunday with German Chancellor Angela Merkel, French President Francois Hollande and EU Commission President Jean-Claude Juncker.
In summary it promises to achieve deficit reduction through higher tax revenues (which is problematic considering the Greek track record of economic contraction and falling incomes since 2008 and the fact that the Syriza government just spent 5 months haggling with the Troika instead of implementing even one actual reform) and includes none of the spending cuts demanded by the Troika.
Greece just played its final bluff. And now, as Yanis Varoufakis also wrote in in Germany’s Frankfurter Allgemeine Zeitung, Angela Merkel faces “a stark choice” ahead of the crucial summit of European leaders in Brussels on today (22 June).
In other words the Greek parliament has washed its hands of the Greek fate, and a Grexit – if it happens – will be blamed on Angela Merkel and Germany, if only in Greece.