Greek Prime Minister Alexis Tsipras flew to Brussels to meet his country's EU-IMF lenders to try to secure an agreement to avert a default in Greece.
Greece's government offered in talks with its creditors billions worth of "harsh" new budget savings. The proposed measures, worth 8 billion euros, included increases to company and consumer taxes, steps to eliminate early retirement options,privatizations and cuts in defense spending of 200 million euros; but Tsipras told aides that creditors had not accepted the revenue-raising measures, a Greek government official said Reuters.
In their counter proposal Greece's creditors insist on savings of 1% of GDP in 2016 and demand from the Greek government to eliminate the social solidarity allowance for pensioners (EKAS), by the end of 2017.
They also demanded Athens raise 1.8 billion euros – or 1 percent of GDP – by increasing value-added tax to 11 percent for items including drugs and 23 percent for items including electricity, the sources told Reuters.
Concerning corporate taxes Greece proposed increased rates of 26 to 29 percent while lenders opt for a 28 percent rate.
"This strange attitude can only mean one of two things: either they do not want an agreement or they are serving specific interests in Greece," Tsipras said in a tweet.
"Nothing has broken down, negotiations are going on and the meeting with Tsipras will go ahead as planned."
"Positions before the meeting with Tsipras are still apart on many points," the source said, listing pensions, VAT and corporate taxation. "There was not much progress yesterday."
The issue of debt relief, a key demand on the Greek side, had not even been discussed, the official said.