Greece, Creditors Wrangle Again Over Austerity, Bank Raids

Faced with implementing austerity measures and reforms it once bucked, Greece's coalition government was in furious talks with its lenders in a last-ditch bid to avoid implementing or changing some of the toughest conditions, delaying release of a critical 2-billion euro ($2.15 billion) installment.

ATHENS – Faced with implementing austerity measures and reforms it once bucked, Greece’s coalition government was in furious talks with its lenders in a last-ditch bid to avoid implementing or changing some of the toughest conditions, delaying release of a critical 2-billion euro ($2.15 billion) installment.

The two sides were still negotiating ahead of a Nov. 9 meeting of Eurozone ministers in Brussels where it seemed unlikely aid would be released even as Prime Minister and Radical Left SYRIZA leader Alexis Tsipras wants to water down measures that have rankled the electorate as he continues to break virtually every campaign promise he made.

Among the thorniest issues was insistence by the Quartet of the European Union-International Monetary Fund-European Central Bank-European Stability Mechanism (EU-IMF-ECB-ESM) that banks be allowed to foreclose on homes of people who can’t pay because of big pay cuts, tax hikes, slashed pensions and worker firings, all antithetical to SYRIZA’s alleged leftist principles and Tsipras’ promise to protect society’s most vulnerable sectors.

Also unsettled are changes to a 100-plan installment plan for unpaid taxes that doesn’t apply to tax cheats who aren’t being chased and how the government intends to find offsetting revenues to avoid implementing a 23 percent Value Added Tax (VAT) on private schools that Tsipras said before the Sept. 20 snap elections he would reject but agreed to impose the moment he won. It was said gambling taxes would be raised to make up the difference.

The Greek government is trying to find a formula that would protect at least half of local homeowners, compared to the proposal from the Quartets, which would lead to just 20 percent not facing the threat of losing their home if they do not keep up with their mortgage repayments, Kathimerini said.

On the 100-installment plan, the Quartet wants the government to move instantly against people who are a day late with a payment, unlike the current 26-day grace period, with the government said to be buckling.

But the big bugaboo for Tsipras is the government raiding private bank accounts over 100,000 euros ($107,420) to make depositors pay for the country’s crisis, along with workers, pensioners and the poor while tax evaders and the rich continue to escape.

If the banks aren’t recapitalized by the end of the year, the so-called “Bail-in,” which critics call legalized bank robbery by the government – as happened on Cyprus – would kick in, further ruining small businesses already hamstrung by capital controls.