Greek PM rejects 'absurd' offer from lenders, delays IMF payment

Fri Jun 5, 2015 5:37pm EDT
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By Karolina Tagaris and Angeliki Koutantou

ATHENS (Reuters) - Greek Prime Minister Alexis Tsipras on Friday spurned "absurd" terms of proposed aid from lenders and delayed a debt payment to the International Monetary Fund, prolonging an impasse that threatens to push Greece into default and out of the euro zone.

In a defiant speech aimed at winning parliament's backing for his rejection of the austerity-for-aid package, Tsipras balanced indignation with confidence that a deal was "closer than ever before" to keep his country inside the currency bloc.

The contradictory message underscored the growing pressure on Tsipras to quickly sign a deal before cash-strapped Athens runs out of money, while also trying to placate hardliners in his leftist party who oppose the terms creditors are demanding.

One far-left deputy minister suggested snap elections as a way out, by obtaining public legitimacy for difficult decisions to secure aid. But Tsipras made no mention of elections in an address that focused on attacking the aid plan offered by euro zone and IMF creditors.

"The Greek government cannot consent to absurd proposals," Tsipras told parliament. "I want to believe that this proposal was a bad moment for Europe or at the very least a bad negotiating trick and will soon be withdrawn by the masterminds themselves," he said.

He was speaking after Athens delayed a 300 million euro payment due to the IMF on Friday, a highly unusual step that rattled financial markets and sent Greek stocks down 5 percent but that does not yet signal a formal default.

Opinion polls published on Friday show around three out of four Greeks want to remain in the euro zone, while more want their government to accept the offer from European and IMF creditors than want it to be rejected.

But the lenders' proposal crosses many of Tsipras's 'red lines,' including hiking taxes, privatizing strategic assets and cutting benefits for poor pensioners.   Continued...

A European Union flag (L) and a Greek national flag flutter as the ancient Parthenon temple is seen in the background in Athens June 1, 2015.   REUTERS/Alkis Konstantinidis