Greece still facing demands it cannot agree to, says Varoufakis

Greece’s finance minister Yanis Varoufakis said his country is still facing demands from creditors that it cannot agree to.He said Greece’s commitment to stay in the euro zone was absolute but it would not accept any solution to its debt crisis that it considered “unviable”.

As European leaders scramble to secure a deal just days before Athens has to meet a crucial repayment deadline, Mr Varoufakis told RTE Radio: “As a debtor I have duty not to take on more loan tranches unless at some point these debts will be repaid.”

“So when I’m asked to put my signature on the dotted line of an agreement which is clearly unviable I’m not going to do this.”

He claimed political leaders, including the Irish Government, were being kept in the dark regarding the various proposals his government was bringing to the table and as a result their perspectives were being skewed.

“What they hear is what the institutions tell them,” he said, noting the hardline stance taken by some leaders in the negotiations.

“If your finance minister and I were to sit down and I were to explain my proposals….Michael Noonan would agree that they are very reasonable,” Mr Varoufakis said.

He claimed Greece had undergone five times the level of fiscal consolidation that Ireland had in the last five years.

“We have actually squeezed out of our public sector expenditure almost everything except low wages and low pensions.”

Because of this huge consolidation effort – what he described as a “gargantuan dose of austerity” – the Greek economy had shrank by 27 per cent and was continuing to shrink.

“So when the institutions come to us and they insist that we should have more consolidation, more cuts, more austerity to the tune of 2.5 per cent of GDP, I put to you it is impossible to effect this without increasing taxes.”

“I am against increasing the corporate tax, but then again I am against raising the tax on hotels and against cutting the pensions of people who live below the poverty line,” he said. “These issues are putting me and my government in an impossible position, having to make a bad choice among really hard, difficult bad choices”.

He indicated his government might accept a deal involving some form of rescheduling of Greece’s debt rather than a write-down as it has been seeking.

Greece needs to reach an agreement over reforms to its economy with its creditors – the IMF, the European Central Bank and European Commission – before they will release the latest €7.2 billion instalment of bailout funds.

Without the money it will be unable to make a €1.5billion payment due to the IMF next Tuesday, potentially triggering a catastrophic financial collapse that could see it forced out of the euro.

Tanaiste Joan Burton said nobody is opposing anything in relation to the Greek deal.

She said negotiators on Greek side need to explain their position clearly and how their proposals will be delivered.

Ms Burton said: “There has been a lot of ‘now you see it now you don’t’ on these negotiatons. There has lot of papers flying around.

“Lets have a clear set of proposals, let’s have a reaction to them and let’s make a deal that can enable Greece to stay in euro zone and one the Greek Government will deliver on.”

Ms Burton said Greece is suffering a humanitarian crisis and the Government faced some very difficult issues.

The Minister for Health Leo Varadkar said the Greek proposals are “heavily focused” on tax.

He said he wondered whether that was the right course for the country.

Mr Varadkar said there needed to be” a degree of realism from Government authorities”.

Germany’s EU Commissioner Guenther Oettinger, meanwhile, said Greece’s exit from the euro zone will be inevitable if Athens and its lenders do not come up with a solution within the next five days.

. “We will do everything up until the 30th so that the Greeks show they are prepared to reform,” Mr Oettinger told Deutschlandfunk radio. “A ‘Grexit’ is not our aim but would be unavoidable if there is no solution in the next five days,” he said.

Source:http://www.irishtimes.com/business/economy/greece-still-facing-demands-it-cannot-agree-to-says-varoufakis-1.2263851

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