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10/06 – Greek bailout talks continue

Most European media continue to widely cover the Greek bailout talks. All Greek media report that today’s trilateral meeting of Greek PM Alexis Tsipras, German Chancellor Angela Merkel and French President Francois Hollande in Brussels, to discuss Greece’s new proposal handed over yesterday to the IMF, the ECB and the European Commission, might be of decisive importance for the Greek government.

 The submission of the proposal follows last week’s impasse, when Greece’s creditors responded to a 47-page document with a brief counter-offer that Athens rejected as containing “absurd” measures that would hurt the economy and ill-affect the Greek people. Les Echos, reports that creditors were not convinced by the two new proposals submitted yesterday, considering them “insufficient.” One of the Greek proposals focuses on fiscal targets, calling for primary surpluses of 0.75% of GDP in 2015, 1.75% in 2016, and 2.5% in 2017.

These targets are lower than what Athens’s creditors were calling for in their proposal, but higher than what Greece had originally proposed, media report. The proposal also foresees higher revenue from value-added tax than what Greece had originally proposed, the officials said, estimating VAT revenue of €1.36 billion in 2016. Still, Greece’s creditors have been asking for an overhaul of the VAT system that would generate €1.8 billion, or about 1% of GDP. Meanwhile, 22 Syriza deputies sent a letter, calling the government to remain devoted to the party’s programme regarding labour issues, Greek media report.

According to Eurogroup President, Jeroen Dijsselbloem, “Greece underestimates the complexity of what it is being asked,” believing that an agreement is still beyond reach, Público and Les Echos and Cypriot media quote him as saying. Nevertheless, in an interview with Latvijas Radio 1, Vice-President Valdis Dombrovskis claimed yesterday that an agreement is possible if Greece really wants it. Greek Minister of State Nikos Pappas clarified that Athens has not received any written reply on behalf of the EU, Alpha TV reports.

Kathimerini and the Financial Times comment that this time, Greece has lost the Commission as an ally. The newspaper reports that President Juncker claimed that the concessions that have been made on his part have been exhausted. “In order to remain friends one has to respect some minimum rules,” President Juncker said, quoted by Delo. FAZ, Standart daily and Alpha TV refer to Alexis Tsipras’s interview with Corriere della Sera published yesterday. Alexis Tsipras’s statement that a Grexit would be the beginning of the end of the euro area is considered a real threat by many EU politicians. Bloomberg writes that the negotiations are likely to continue for another year.

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