Greek government faces dissent as debt deadline nears

AP News
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Posted: Jun 01, 2015 11:03 AM
Greek government faces dissent as debt deadline nears

ATHENS, Greece (AP) — Greece's cash-strapped government faced fresh dissent from within the ruling Syriza party on Monday after failing to deliver on a promise to reach an agreement with rescue lenders over the weekend.

With a debt repayment looming Friday that Greece cannot afford, the government was trying to quell an internal squabble — it dropped its candidate to be the next representative at the International Monetary Fund after nearly a third of Syriza lawmakers demanded the appointment be canceled.

Bailout negotiator and former World Bank employee Elena Panaritis said in a statement she was "unable to accept the appointment" because of the opposition within the left-wing ruling party.

Prime Minister Alexis Tsipras is struggling to reach a deal with bailout creditors to get more bailout loans, without which it cannot afford debt repayments it owes the IMF this month, starting Friday. But Tsipras faces opposition within own party to any agreement with creditors that would extend budget austerity measures that creditors have been demanding.

In a letter to the government, 44 of Syriza's 149 parliament members described Panaritis as a "leading representative of bailout policies."

The government has indicated that to cover a series of June 5-19 IMF repayments totaling more than 1.5 billion euros ($1.7 billion) it could take the emergency option of 'bundling' repayments till the end of the month.

Government officials could not be reached for comment Monday about whether Athens was considering the emergency move.

Last month, more than a third of the ruling party's 201-member central committee voted to skip the next IMF payments and prepare for a potential euro-exit — a proposal rejected by a narrow majority.

Greece's bailout lenders — fellow eurozone states and the IMF — argue that more cost-cutting measures are needed to make the Greek economy more sustainable. The reforms include higher overall sales taxes, a new tough round of pension reforms, and further cuts in job protection regulations.

Athens insists it has provided a viable alternative to the lenders' proposals, with commitments to raising sales tax income, slashing early retirements, and by imposing new taxes on high company profits and Internet gambling.

But a promise by the government to reach a conclusion by Sunday failed to materialize.

"Intense technical discussions have been taking place over the weekend and are continuing to take place ... Progress has been made but we are not yet there," EU Commission spokeswoman Mina Andreeva said in Brussels.

On Sunday, Tsipras held a 35-minute call French President Francois Hollande and German Chancellor Angela Merkel on the Greek debt crisis.

Merkel and Hollande are due to meet later Monday in Berlin with European Commission President Jean-Claude Juncker, though Greece was not officially on the agenda of the talks.

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AP writers Raf Casert in Brussels and Geir Moulson in Berlin contributed.