Greece refuses latest bailout demands with a simple 'no'

Greece has entered a new round of bailout talks with creditors that are expected to stretch into the weekend, but insists it is not ready to make key concessions despite facing a major debt repayment soon.

“My answer is simple: No, no, no,” finance minister Yanis Varoufakis said today, referring to key reforms demanded by bailout lenders.

The creditors have for three months been trying to get Greece to agree to a list of budget measures before they accept to pay it the remaining €7.2 billion instalment of its bailout programme.

Without the money, Greece is not sure it will be able to meet a repayment to the International Monetary Fund on May 12 worth some €750 million.

Rescue creditors argue the country has fallen behind on long-term reforms that would allow it to get back on its feet: lowering state funding for pensions, increasing turnover of staff in state jobs, further dismantling job protection rules, and simplifying sales-tax rates.

But Greece’s left-wing government argues the reforms cannot continue with the same speed and severity as in previous years, after the country suffered a drastic drop in output and increase in unemployment.

In Brussels, EU Commission spokesman Margaritis Schinas said negotiations involving representatives from eurozone nations, the European Central Bank and the International Monetary Fund had started and would stretch into the weekend.

“They are being held in a constructive spirit,” he said.

A eurozone official who asked not to be identified because the talks are ongoing said that if there is a breakthrough at the negotiations a meeting of finance ministers could be convened at short notice, even before the regularly scheduled one of May 11.

Mr Varoufakis indicated his government could make concessions – but only in the summer, after an initial deal is reached to unlock the 7.2 billion euro.

“After June, we are willing to look at many issues,” Mr Varoufakis said. He signalled, for example, he would be willing to raise some sales tax rates.

The confrontation between Athens and its creditors has taken its toll on the fragile Greek economy.

Moody’s ratings agency further downgraded the country’s sovereign rating yesterday to Caa2 from Caa1, two notches above default.

The main reason, it said, for the action was “the high uncertainty over whether Greece’s government will reach an agreement with official creditors in time to meet upcoming repayments on marketable debt”.