Creditors' offer prompts anger, dismay in Greece

Reuters News
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Posted: Jun 04, 2015 5:25 AM

By Karolina Tagaris and Deepa Babington

ATHENS (Reuters) - Lawmakers from Greece's ruling Syriza party reacted with dismay and fury on Thursday to a package of reforms creditors offered Prime Minister Alexis Tsipras in return for cash, with one senior party official calling it a "murderous" proposal.

The starkly negative reaction points to a growing risk of a rift or outright revolt within the radical leftist party, which could prompt Prime Minister Alexis Tsipras to resort to early elections to overcome divisions and win acceptance for a deal.

Avgi, the Syriza party newspaper headlined its Thursday edition: "A continuation of austerity? No, thanks!", while the top-selling daily Ta Nea splashed: "Death toll required for an agreement."

Full details of the plan drawn up by European and IMF creditors have yet to emerge after European Commission President Jean-Claude Juncker outlined it to Tsipras at late-night talks in Brussels. But partial details that have leaked so far showed demands for pension cuts and tax hikes that Tsipras's government would struggle to implement.

"(Juncker) took on the dirty work and conveyed the most vulgar, most murderous, toughest plan when everyone hoped that the deal was closing," Alexis Mitropoulos, a deputy parliament speaker and senior official within Syriza told Mega TV. "And that at a time when we were finally moving towards an agreement we all want because we rule out a rift leading to tragedy."

Lawmakers were incensed in particular by a proposal to scrap a benefit for low-income pensioners and a value-added tax change that Tsipras said would raise the value added tax on electricity by 10 percentage points.

Such measures are anathema to Syriza, which in January became the first radical leftist party to assume power in modern Greek history on a pledge to end austerity and raise living standards for Greeks battered by five years of hardship.

NO SURRENDER

A minority far-left faction within the party has made its anger at the negotiations clear in recent weeks, prompting speculation of an open rift that breaks the party up.

Syriza's policy-making central committee rejected a motion by that faction to halt repayments to the IMF as part of the negotiations by the relatively narrow margin of 95 to 75 after a fierce debate last month.

"What appears to have been discussed and to have been proposed by Mr Juncker during his meeting with the Greek prime minister is beneath (our) expectations in every way," Deputy Shipping Minister Thodoris Dritsas told Greek television. "If reports are confirmed, obviously we cannot accept them."

He repeated an oft-repeated Syriza mantra that Greece would not bow to terms that the party deemed humiliating. "If our lenders want full surrender, they won't have it," said Dritsas, an outspoken opponent of privatizations demanded by the lenders.

The angry reactions piled growing pressure on Tsipras, who has to balance efforts to keep his party together with the simultaneous need to seal a deal with creditors to get aid flowing into Greek state coffers before cash runs out.

Athens has been tottering close to bankruptcy for weeks, and worries about the country's fate have prompted Greeks to withdraw money from banks and sent a ravaged economy back into a recession.

In a sign of the limited options facing the government, one Syriza official said any deal with lenders would win approval by the party's lawmakers after both sides made concessions.

"I believe that when it arrives, it will be approved by parliament," Dimitris Papadimoulis, a Syriza member of European parliament, told Greek television.

"I don't see any high-ranking Syriza member wanting to pull the carpet from under Tsipras' feet."

(Writing by Deepa Babington; Editing by Paul Taylor)