Greek crisis: Athens defends tax rises in bailout deal - as it happened

Graeme Wearden (until 2pm BST) and Nick Fletcher (

from on 2015-06-24 05:37 (#C509)

Greece's bailout drama has entered a crucial 48 hours, as the two sides strive for an agreement by Wednesday night

6.36pm BST

Greece's minister of state Nikos Pappas has said the deal with the country's lenders will be backed by parliament and supported by the people, according to Reuters.

And on that positive note, it's time to close up for the evening. Thanks for all your comments and we'll be back again tomorrow.

6.09pm BST

Dog wearing the pennant of PAME trade union, Athens protest against IMF/ECB deal tonight pic.twitter.com/TWKA3uoiQX

5.51pm BST

More marches:

Another day, another march. pic.twitter.com/rv1bkMNOMs

They've been going by for ten minutes and not letting up yet. Big march. pic.twitter.com/nnsRsXdLk0

Tonight's march - older, calmer, more organised. Trade union & communist led. pic.twitter.com/PX02jeKaBX

5.33pm BST

Back in Athens, the government's junior coalition partner, the small right-wing Independent Greeks party (Anel), has made resolution of Greece's debt problem, a precondition of its support of any deal that is eventually reached, reports Helena Smith.

"Our red lines remain," Panos Kammenos, the party's leader, is reported to have told MPs who (as we flagged earlier) met in extraordinary session this afternoon to discuss the government's proposed reforms. "It is now very clear that it is Greece that is negotiating, not simply a government that is negotiating. We hope that the course of negotiations will be positive for the Greek people."

Parliamentary endorsement of the agreement would be premised on whether the debt issue was tackled with a legal commitment on the part of creditors to some form of debt relief, party members said.

5.23pm BST

Signs that Greece and its creditors might be edging towards a deal ahead of the deadline for bailout funds to run out have again given investors cause for optimism. Equities have moved higher again and Greek bond yields slipped back, but everyone is still too well aware there are still some hurdles to negotiate. The final scores showed:

5.05pm BST

Greece shortened from 1/5 to 1/7 to remain in Eurozone during 2015, out to 4/1 from 10/3 to exit. #Grexit

4.40pm BST

Over in Athens, a top government officials reiterated this afternoon that an agreement, when (if?) sealed, would be put before parliament for vote possibly as early as this weekend, reports Helena Smith.

As negotiations continue in Brussels there is mounting speculation in Athens that an agreement will be reached by Friday - and brought before the 300-seat House for endorsement possibly as early as the weekend.

Speaking to the leftist radio station Kokkino.gr, the minister of state, Alekos Flambouraris, said there would be no quashing of dissent. Parliamentarians would vote on the legislation according to their conscience and not under the threat of party discipline. In the event of the legislation not being passed, "it would have to be resolved by resorting to the people," he said.

"I think the government will achieve an agreement which is quite difficult but indispensible in my view," said the politician widely seen as mentor to prime minister Alexis Tsipras. "There will not be an issue of discipline," he added, insisting that it was vital the deal won the backing of the majority of government MPs.

"For the government to forge ahead in difficult conditions after the agreement, and to restart the economy and kick-start the country's productive reconstruction, it has to have a unanimous parliamentary group which will put the programme into effect," Flambouraris said.

4.37pm BST

Here's Reuters snapshot of the MNI report:

4.27pm BST

A potential problem perhaps, as apparently flagged up by news agency MNI:

IMF DISAGREES WITH GREECE ON CORPORATE TAX, VAT AND PENSIONS - EU SOURCES

with latest MNI story its all a matter of headline choice as the bottomline conclusion of article is that IMF will come aboard on Thursday

4.16pm BST

Here's an early picture of the pensioners protest in Greece:

Angry pensioners have descended from all over #Greece. Organisers say at least 70 coaches have arrived in #Athens pic.twitter.com/rK9sG5NzBo

4.11pm BST

Any agreement between Greece and its creditors may not yet be done, but the progress that seems to have been made in the past day or so has continued to give a sense of optimism to the markets.

So the Athens stock market has ended the day up 6.11% - making a two day rise of 15.66% - while on the bond markets, the yield on Greece's two year paper has fallen from 23.77% on Monday to 21.04%.

4.05pm BST

More talk about how things may progress (or not) from here:

German parliament may vote on 29/30 June on Greek deal; will not vote before Greek lawmakers have approved deal, however

3.47pm BST

And here's why some may be unhappy with the Greek proposals:

#Greece proposals equivalent to an upfront tightening of 3% of GDP, which is nearly as big as the first wave of tightening in 2010 ~Deutsche

3.36pm BST

Emergency funding from the Bank of Greece to the country's banks rose by 4.3% in May to a77.58bn, new figures have shown.

3.08pm BST

Of course Greek prime minister Alexis Tsipras still has to get any agreement through his own parliament:

Some Syriza MPs unhappy w Greek proposal but revolt tht could unseat gov not (yet) tangible. Coal partner stance unclear

3.02pm BST

Gabriel added, "We will see if the Greek proposals are sufficient. If not, we'll have to keep talking."

2.33pm BST

Germany's vice chancellor Sigmar Gabriel has joined the chorus saying there is now a chance of agreement, although he adds that a debt haircut for Greece would be no use if new debts were racked up (quotes courtesy Reuters):

2.28pm BST

If a deal is done, then Greece is unlikely to miss its a1.6bn payment to the International Monetary Fund due at the end of the month. But as a reminder here is what would happen if it did:

REMINDER: Here's what happens to a member missing an IMF payment. Nothing bad, really. @Lagarde and #Greece know it. pic.twitter.com/UL53J0vorD

2.06pm BST

Time for a recap.

The Greek government has come under fire over the compromise proposal it submitted to its lenders on Monday, amid warnings that it will hurt growth and cost jobs.

"We are fully aware that there are in the proposal, measures that are hard and which under other circumstances we would never take."

Will I be seeing more elderly ppl in shabby suits(suit =the last illusion of dignity) rummaging in supermarket bins? pic.twitter.com/ITbOv0dAJG

Utter, comprehensive brain-deadness of Europe : supporting crashing #Greece economy with higher taxes & state charges. Well done, #Euro land

#Eurogroup meeting has been called. Party starts at seven. https://t.co/BXrIQzqdgt

Off the Cliff: 10-year bonds as deal in sight #Greece HT @Investingcom pic.twitter.com/F4uFpIVUjg

1.17pm BST

Here's a handy list of the Greek proposals which are now being examined by officials from its lenders right now:

When I see headlines proclaiming that the new deal offers hope for Greece I do wonder what universe the writers are living in! The cycle so far involves Greece implementing austerity followed by economic weakness and at times collapse which means that yet more austerity is required and then repeat. On that road the economy has shrunk by a quarter and real wages have fallen by a third.

What has been done to Greece is bad enough but to learn so little from it that you are willing to do it again seems insane under the Albert Einstein definition. Even worse is the fact that one of the ways that Greece entered its crisis was an inability to collect its taxes particularly on the wealthy and its equivalent of the oligarchs. Thus a solution essentially based on higher taxes has an obvious flaw.

This new Greece bailout proposal will crash the economy once again http://t.co/08CTsehe0e via @notayesmansecon #Greek #Depression #IMF

1.02pm BST

Over in Athens the business community has reacted with horror to the Greek government's proposed reform package.

"A proposal with a different mix of measures and growth plan would satisfy the demands of a viable solution."

"Relief that the country has averted catastrophe, that the government itself threatened it with - five years after 2010 - can't hide the fact that we got here in the worse possible way."

12.57pm BST

We'd like to hear from Greeks about their experiences of living with the economic situation in Greece. You can share your perspectives with GuardianWitness by clicking on the blue contribute button.

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12.52pm BST

Eurozone finance ministers are to meet tomorrow night to discuss the Greek crisis, according to reports from Brussels.

That's the third meeting in six days, and surely the last chance to sign off an agreement.

*EUROGROUP TO MEET JUNE 24 AT 7 P.M.: DIJSSELBLOEM SPOKEMAN #Greece #euro

Another eurogroup meeting on Greece tomorrow. Soon they'll probably just start announcing the days on which a meeting not to be held.

12.48pm BST

The Athens stock market is rallying hard today, as the risk of Greece leaving the euro decline.

The main ATG index is up another 4.4%, having surged by 9% on Monday:

12.04pm BST

Greece's newspapers are united in warning that the country faces fresh pain, thanks to the a8bn of new tax rises and cuts contained in yesterday proposals submitted by Athens:

#Greece Headlines Ta Nea: 8bn Cuts and They Want More! EtS: Toward a Harrowing Compromise ET: Shock Memorandum pic.twitter.com/8Zswmdt9Hl

12.01pm BST

The cost of buying protection against a Greek default has fallen sharply today, as this chart of credit default swap prices (which pay out if Athens defaults) shows:

Price to insure against Greek default (CDS) drops as S&P assumes #Greece to be in a at yr-end. http://t.co/HUPWxnF7Jk pic.twitter.com/151GWuI9i2

11.57am BST

There are mounting signs that Greeks are not going to take the new measures lying down, despite the government's attempts to defend the plan this morning.

"Pensions have been cut by between 60 and 40 percent and now they want more with additional income for health care and the like, services that we paid for all our working lives through contributions to funds. It is outrageous. Where are the 13 and 14th pensions that they stole from us? Why should we go on paying the price?

"We have shed enough blood and we have paid enough. Now is the time to resist!"

11.48am BST

The Commission is dropping some heavy hints that it will announce a new stimulus programme to help Greece soon, once an economics reforms deal is agreed.

Last night, Jean-Claude Juncker told reporters that:

"I want ordinary Greeks to know we are offering a35bn to help the economy"

The Commission is currently preparing a package on this... the package and the a35bn are conditional to the conditions being met, and obviously an agreement being found.

European Commission promising a35bn aid package if deal done. How it's "absorbed" will define #Greece future: oligarchic/corrupt or modern?

11.34am BST

Will the list of Greek 'prior actions' being demanded by creditors include a vote in the Athens parliament before June 30?

Spokesman Margaritis Schinas declines to speculate - that will be addressed in tomorrow's eurogroup meeting.

11.25am BST

Give me strength. Commission still want to see Greek "list of prior actions that are mentioned to be spelled out in the form of a list"

11.24am BST

The EC is fielding questions from journalists in Brussels now about the Greek crisis, at the midday briefing.

Was there any discussion about how Greece will pay the IMF on 30 June, as there isn't time to agree bailout payments in time? And is the IMF fully on board?

Finally, @MargSchinas explains Juncker's "prolongation" thing. It means "extra time" duh

11.06am BST

Encouraging news for Tsipras, as he tries to hold his coalition together....

SYRIZA MP Michelogiannakis says he might vote for agreement if he receives "clarification." Expect more of this in coming days #Greece

10.57am BST

Analysts at UBS warn there's still a real risk that negotiations flounder. Here's a section of their latest research note:

10.51am BST

The threat of Greece leaving the eurozone anytime soon has receded, says Carsten Brzeski of ING.

And the last-minute hiccup with the latest Greek proposals (they sent one version on Sunday night, and other early on Monday) has been smoothed out:

At least yesterday, the blame game was suspended, in favour of a more cooperative approach, even if some Eurozone finance ministers obviously still felt a sour aftertaste.

The late submission of the new Greek proposals did not help to reduce built-up irritations. Technical work will resume under a better omen, sustained by the continued support of the ECB. The next steps will be Wednesday's Eurogroup meeting and the European summit on Thursday and Friday. Judging from yesterday's events, it seems as if all players involved have finally started with constructive negotiations. This strengthens our view that a Grexit will be avoided, at least this time around.

10.26am BST

Over in Athens, Greek government officials are insisting this morning that negotiations are still ongoing - the outlines of a cash-for-reform deal may change yet.

"We are fully aware that there are in the proposal, measures that are hard and which under other circumstances we would never take."

"It ensures fiscal benefit."

"It's a bad deal but I prefer a bad deal than rupture from the EU."

10.18am BST

Heads-up. ANEL, the junior partner in the Greek coalition, has called a meeting to discuss the situation.

It's scheduled for 2.30pm Athens time, or 12.30pm BST, according to the To Vima newspaper.

Junior Coalition Partner ANEL parliamentary team meets at 14:30 (local time) over yday's updates. http://t.co/MZYRiyS7vm #Greece

10.12am BST

Calmer but important day for #Greece: new technical details are being worked out today ahead of tomorrow's #Eurogroup. Procrastination over.

9.54am BST

According to Reuters, the ECB has provided Greek banks with another a1bn of emergency liquidity today to keep them afloat while negotiations continue.

#ECB raises emergency funding for Greek banks to around a89bn. http://t.co/mml8EogIlb pic.twitter.com/gBFsfxeo4A

9.41am BST

Kit Juckes of French bank Socii(C)ti(C) Gi(C)ni(C)rale warns that markets optimism can quickly fizzle out, especially where Greece is concerned.

Assuming we do indeed get the last-minute deal everyone expects, then we will simply move on to wondering whether it can be ratified by individual parliaments and then, how long it will last before we need another one.

9.32am BST

Austria's finance minister has warned that Greece won't get any bailout funds unless it has actually agreed a plan to implement various measures:

Hans Jirg Schelling said (via Reuters):

"If there is no programme for actions that says what measure will be implemented when , we will not agree to it."

9.30am BST

Greek assets continue to rally. FSTE Athex Banks index jump by another 5%. pic.twitter.com/kMkl3xh40s

9.13am BST

The Athens stock market is also rising in early trading.

The ATG index had gained 1.5%, adding to yesterday's 9% surge. Bank shares are among the big gainers:

9.06am BST

Newsnight's economics editor Duncan Weldon agrees that taxes on consumer spending and company profits, and raising pension contributions, will not help the economy return to sustainable growth - as the government had been pledging:

Big issue now... What effects the Greek economy more: reduced uncertainty boosting spending or tax hikes reducing it?

A lot of mainstream macroeconomists supported Syriza on straight forward Keynesian grounds. This deal ain't very Keynesian.

8.53am BST

Francesco Papadia, the former director General for Market Operations at the European Central Bank, warns that the Greek proposal fails on two fronts: it doesn't make the economy more competitive, and it doesn't deliver debt relief (yet, anyway....)

We are closer to an agreement on #Greece, but what about its quality? All on fiscal correction, nothing on structural and debt alleviation.

8.38am BST

Europe's investors remain upbeat about the prospect of Greek deal this week.

Stocks have hit their highest level since the start of June in early trading, adding to yesterday's strong rally.

If recent history is anything to go by, there is likely to be a few more twists and turns before a deal is concluded but this is at least a positive sign.

The strong gains in global markets just shows how much investors want a deal to be reached and everyone would much prefer it to be this way, rather than for the uncertainty over a looming default.

8.28am BST

Newsflash: The European Central Bank is rumoured to have agreed to provide more emergency liquidity to the Greek banking sector.

That means the banks can keep running despite suffering a steady outflow of deposits - another a1.6bn is reported to have been withdrawn on Monday.

ECB Said To Raise Emergency Liquidity Cap For Greek Banks- BBG $EURUSD

For the 4th time in the past 6 days. #Greece #ecb #ela #banking https://t.co/McsBjRplR3

8.14am BST

The backlash against Greece's latest proposals is gathering pace this morning.

"We have the experience from 2011 when the increase from 13 to 23 percent in food service brought the shutdown of 4,500 enterprises and the loss of 40,000 jobs."

7.55am BST

The prospect of the Greek crisis vanishing off the front pages has also cheered investors in Japan, where the Nikkei index hit its highest level since the year 2000.

7.48am BST

After surging yesterday, European stock markets are tipped to keep rising this morning on renewed optimism of a deal this week.

#FTSE100 called +15pts at 6835 as Grelief rally extends. After years of last-minute deals, markets long on optimism, short on time

7.44am BST

Having slept on it, EU commissioner Pierre Moscovici is still optimistic that Greece and its creditors are on the verge of a breakthrough.

Il faut travailler dans la si(C)ri(C)niti(C). Je suis convaincu que nous trouverons un accord cette semaine. C'est vital @franceinter @EU_Commission

Il ne faut pas d'austi(C)riti(C) en #Grice. La finaliti(C) est plus de croissance et d'emplois, avec des ri(C)formes structurelles @EU_Commission

7.27am BST

Good morning.

Today's proposals are a positive step....they will be assessed in the coming hours.

We have a huge amount of work to do in the next 48 hours.

The full scorecard of measures from the Greek reform/bailout proposals today. VAT reform and pensions raise the most pic.twitter.com/FaWo87dYbe

There does appear to have been some shifting of ground on the Greeks part on pensions and VAT, as well as higher taxes on business, though with unemployment at record levels, increasing the level of taxes on businesses on their profits, as well as their employees does sound rather counterproductive, given that an estimated 8,500 businesses have closed since the beginning of the year already.

"My personal view is that these measures cannot be voted, they are extreme and anti-social. I believe that in the end, this package which you have at hand, cannot come to the Greek parliament."

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