Talks between Greece and its lenders failed to reach a breakthrough on Sunday evening in Brussels.
Following what it called this "last attempt" at a solution, the EU's executive Commission said that the next opportunity for an agreement to be reached would be at the euro zone finance ministers' meeting in Luxembourg on Thursday.
In a tersely worded statement the European Commission spoke of “significant gaps” in the discussions. “While some progress was made, the talks did not succeed as there remains a significant gap between the plans of the Greek authorities and the joint requirements of the commission, European Central Bank and IMF,” the statement said. These joint requirements amounted to up to 2 billion euros a year in permanent budget savings.
EU officials said that the Greek delegation, led by Deputy Prime Minister Yannis Dragasakis, had offered nothing new. Athens, however, had been insisting over the weekend that the proposals it presented in Brussels would cover any fiscal gap and ensure that the primary surplus targets would be met.
Following the 45-minute meeting, Dragasakis said the Greek delegation remained ready to resume talks. “The Greek government’s delegation stands ready for the completion of the negotiations to reach a mutually acceptable agreement,” he said. He also claimed that lenders’ representatives were not authorized to discuss anything other than demands for cuts of 1.8 billion euros per year (roughly 1 percent of GDP) to pensions and another 1.8 billion euros per year to be raised from increases or changes in value-added tax. On a final remark the Deputy Prime Minister blamed European lenders for insisting on pension cuts and value-added tax hikes to close the projected budget gap.
Meanwhile Athens is sticking to its non-negotiable "red lines" on labor and pension issues. SYRIZA has ruled out further cuts to pensions ans salaries or a possible VAT increase in basic commodities and power bills. The government also claimed that it will not adopt permanent austerity measures that will only prolong a recession.