By Leigh Thomas and Lefteris Papadimas
Greece said on Tuesday it had sent a comprehensive reform proposal to its international creditors, urging them to be realistic and accept the plan to clinch a long delayed deal to release frozen aid before Athens runs out of cash.
The announcement by leftist Prime Minister Alexis Tsipras came hours after leaders of Germany, France and the lending institutions held emergency talks on the Greek debt crisis in Berlin in a sign of top-level concern about the impasse.
It appeared to be an attempt to pre-empt a take-it-or-leave-it offer by the creditors and to show Greek voters that Athens, too, is putting forward proposals.
“We have submitted a realistic plan for Greece to exit the crisis. A realistic plan, whose acceptance by the institutions, our lenders and our partners in Europe will mark the end of the scenario of divisions in Europe,” Tsipras told reporters.
“It is now clear that the decision on whether they want to adjust to realism … the decision rests with the political leadership of Europe.”
It was not immediately known whether the document, which some EU officials said they had not yet seen, gave any ground on the main outstanding issues of pension and labour market reform, fiscal targets and the size of the civil service that have dogged four months of tough negotiations.
A European Commission spokeswoman said many documents were being exchanged among negotiators, which was “already a good sign”. Talks with Greece were continuing and “we are not there yet”, she said.
Sources close to the negotiations said there were no major concessions on the deal-breaking issues in the Greek paper.
The European Union’s economics chief said earlier Athens had put forward first proposals for pension reform as the talks reach a crunch point this week with Greek funds drying up.
The leaders who met in Berlin agreed to work with “real intensity” to try to wrap up the negotiations in the coming days and to keep in touch with each other and with Tsipras.
Their meeting showed that national and international leaders have now taken the battle to keep Greece in the euro zone into their own hands after months of insisting it was a matter for technical negotiations among experts.
Failure to reach agreement this month could trigger a Greek default and lead to the imposition of capital controls and a potential exit from the euro zone, dealing a blow to Europe’s supposedly irreversible single currency.
A Greek government official said Athens would make a 300 million euro ($329.58 million) repayment to the IMF on Friday as due if there was an agreement with the creditors, hinting it might otherwise withhold the money without saying so explicitly.
“If we judge that a deal has been sealed, then we will make the June 5 payment normally,” the official said, adding that the money would be transferred if there was a preliminary agreement that was not yet approved by Eurogroup finance ministers.
EU Economy Commissioner Pierre Moscovici said the talks were making progress at last, citing what he said were new Greek proposals on pensions, a core issue for the creditors, who are demanding some benefit cuts and a crackdown on early retirement to make the complex system financially sustainable.
Greek officials played down talk of new pension proposals.
“Greece has been flexible for a long time on pension reform, willing to scrap incentives for early retirement and proceed with merging pension funds. This is what is still on the table,” a Greek government official said.
Greece’s central bank governor, Yannis Stournaras, who served as finance minister in a previous conservative-led government, urged the government to respect the “sacrifices” its people had made to stay in the euro, citing a 35 percent drop in living standards during the crisis that began in 2009.
Moscovici deflected Greek demands for official debt relief, saying the issue of making Greek debt sustainable in the longer term would only be addressed once Athens had accepted a cash-for-reform deal to release some 7.2 billion euros in frozen aid.
That programme expires at the end of June unless there is an agreement.
The ECB’s top banking supervisor, Daniele Nouy, stressed on Tuesday that Greece’s banks remain solvent despite deposit outflows and the government’s cash squeeze – a key condition for the central bank continuing to provide emergency liquidity.
In public, Greek ministers continued to be defiant. Deputy Prime Minister Yannis Dragasakis said on his Twitter account that Greece’s economy and society could not bear more austerity, and any deal must include a clear roadmap to debt sustainability.
“As a government we do not accept ultimatums, nor do we surrender to blackmail,” he said, stressing that the leftist government would stick to its popular mandate.
Labour Minister Panos Skourletis said on Skai TV that Greece could not make any more concessions for a deal and it was up to the creditors to make concessions now.
A French presidency official hinted after Monday’s talks that there were still differences among the lenders on the terms for a deal, after Greek officials said the IMF was toughest in demanding pension cuts and opposing any restoration of collective wage bargaining.
“(The leaders) agreed to work intensively to achieve a joint position of the institutions and to remain in close contact with Alexis Tsipras,” the French official said, suggesting there were still gaps to be bridged among the creditors.
Greece has received two EU/IMF bailouts totalling 240 billion euros since 2010, when it lost access to capital markets after admitting it had issued erroneous figures for years concealing the true scale of its budget deficit.