Divisions remain on Greece as officials meet for last push

Prime Minister Alexis Tsipras flew to Brussels to meet Greece's international creditors on Wednesday to try to bridge gaps on key elements of the proposals made by his left-wing government to shore up state finances in return for vital loans.

Athens had proposed increasing value-added tax (VAT), corporate tax and pension contributions in order to meet budget targets, but Tsipras told aides that creditors had not accepted the revenue-raising measures, a Greek government official said.

“This strange attitude can only mean one of two things: either they do not want an agreement or they are serving specific interests in Greece,” Tsipras said in a tweet.

Greece has been pushing creditors hard to write off part of its huge public debt, arguing that without it, the economy cannot recover from a crisis that has cut overall output by a quarter and pushed the unemployment rate to 25 percent.

But after months of fruitless and often acrimonious wrangling, there has been no sign from European governments of any willingness to accept a debt write-down, which they would have to explain to their own electorates. 

Markets reacted nervously to the comments from Athens, but a European Union official close to the talks, who declined to be named, told Reuters talks were continuing: “Nothing has broken down, negotiations are going on and the meeting with Tsipras will go ahead as planned.”

Still, with time running out before the June 30 deadline when Greece has to repay $1.79 billion to the International Monetary Fund (IMF) or go into default, another EU official close to the talks said major differences remained.

“Positions before the meeting with Tsipras are still apart on many points,” the EU official told Reuters, listing pensions, VAT and corporate taxation. “There was not much progress yesterday.“

The issue of debt relief, a key demand on the Greek side, had not even been discussed, the official said. 

Tsipras was to meet the heads of the European Commission, the IMF, the European Central Bank, eurozone finance ministers and the bloc's rescue fund in Brussels to hear their official response to Greece's proposals, EU and Greek officials said.

Eurozone finance ministers were due to convene later Wednesday to finalize an agreement for the currency area's leaders to approve on Thursday.

Tsipras came to power in January on a promise to end harsh austerity measures that were conditions of two previous European bailouts, but has compromised on the terms that Greece would be willing to accept for more loans. That leaves open the possibility of a backlash from his own leftist Syriza party that could make it harder to get an accord approved in parliament. Economy Minister Giorgos Stathakis said lawmakers would have to approve the package before Greece's international bailout expires on June 30.

Some eurozone parliaments, including leading creditor Germany's, will also have to endorse it before the deadline. A series of street protests in Athens in recent days, some organized with Syriza's support, have underlined public opposition to yet more belt-tightening.

“There are four people in my household, and we are living on 600 euros a month. Where else does that happen?” said 59-year-old Antonia Methoniou, a cancer patient who took early retirement for health reasons.

The finance ministers of the 19 nations that use the euro are expected to work deep into the night to finalize the details of any deal before the leaders open their summit.

“Their expectation is not to negotiate,” said an official of the EU government leaders. “Their expectation is to welcome an agreement,” the EU official said, speaking on condition of anonymity because of the sensitivity of the talks.

Despite the lingering disagreements with the IMF and several EU officials, Greek Economy Minister Giorgos Stathakis said he was confident an agreement could be finalized within the day.

“The details are what's left — a small gap,” he told private Mega Television. "It'll be over today." 

Al Jazeera and wire services