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Tuesday 24th
posted by Morning Star in World

Tough demands met as Athens lines up for €11bn bailout

by Our Foreign Desk

ATHENS is hoping to receive €11bn (£8.5bn) from its eurozone economic supervisors today after the “radical left” Syriza government agreed to knuckle under once more to unsustainable demands on Sunday.

Prime Minister Alexis Tsipras dangled an image of light at the end of the tunnel before the Greek parliament prior to the vote.

“Greeks have already paid a lot, but this is probably the first time that the possibility of these sacrifices being the last is so evident,” he said.

Mr Tsipras added that each time Athens exceeds its annual primary surplus targets, the extra state revenues would go to a social solidarity fund, meaning that about €700 million (£540m) would go to the fund this year.

The latest assortment of tax rises, a new privatisation fund and sell-off of “non-performing loans” could be rewarded with €3.8bn to reduce loan arrears and €7.2bn to service existing IMF loans and European Central Bank bonds maturing in July.

The package backed by parliament includes pushing up VAT by one point to 24 per cent, increasing fuel consumption tax, introducing a special tax on cigarettes, tobacco and electronic cigarettes, a new levy on craft beer, a new tax on imported coffee, consumption taxes on fuel and natural gas use and a new overnight accommodation tax for hotels.

Hundreds of demonstrators rallied outside parliament in the evening to protest against the price rises.

Talks between Athens and its foreign creditors over the demands have dragged on for months, mainly due to a rift between the EU and the IMF over Greece’s fiscal progress.

The IMF insists that Greece cannot achieve a 3.5 per cent primary surplus target in 2018 or later without substantial debt relief and restructuring measures now.

It has set both as conditions for its participation in the bailout, which, above all, benefits British, German and French banks that gave risky loans to Greek institutions.

nRussian news agency Tass announced yesterday that President Vladimir Putin will visit Athens on Friday to discuss “bilateral trade, economic and investment interaction, including the implementation of joint energy and transport projects.”

Those joint energy projects could include a landmark bilateral €2bn gas deal outlined last July.