Greece threatens to upset EU's Rome declaration over reform demands

Greece is holding back its support for the Rome declaration to protest reforms its European Union lenders are seeking from it in return for new loans, officials say.

Photo by: AP
Photo by: AP

Protesting tax office workers hang a banner from the finance ministry in Athens that reads: "Reduction of tax free limit means new cuts to salaries and pensions. Stop Austerity."

Greece is withholding its support for the Rome declaration in protest at reforms its European Union lenders are seeking from it in exchange for new loans, officials said on Tuesday.

Twenty seven EU nations are to chart the bloc's course after Britain leaves in the form of a declaration on Saturday.

Athens's lenders are the other euro zone governments, who are also trying to get the International Monetary Fund (IMF) on board.

IMF says it will join the latest Greek bailout only if Athens reforms its pension and taxation systems and its labour market more to modernise its economy and make the public finances sustainable.

But after implementing austerity policies for years, the new round of reforms will be politically very difficult for the Greeks to swallow, and the government in Athens argues that they are not necessary.

Greek officials said they cannot sign the Rome declaration on values shared by the EU unless it clearly protects labour rights.

Greek Finance Minister Euclid Tsakalotos (right), EU Economic and Financial Affairs Commissioner Pierre Moscovici and Eurogroup President Jeroen Dijsselbloem (left) took part in a eurozone finance ministers meeting in Brussels on Monday. [Reuters]

Negotiating compromise 

A draft of the declaration says that EU leaders will work towards a Union which promotes economic and social progress as well as cohesion and convergence, taking into account the variety of social models and the key role of social partners.

"They [Greece leadership] said it's difficult for them to celebrate in Rome while one of the non-European institutions is pursuing policy that has significant effects on the Greek economy," one EU official with insight into the issue said.

Officials representing the IMF and the euro zone lenders as well as the Greek government will be negotiating a compromise on the reforms in the coming days in Brussels, but positions remain far apart and are unlikely to be reconciled by Saturday.

"They're going to use this (Rome declaration) as a negotiating tool," a second official said, adding that Athens was hoping European lenders would help them fight the IMF's reform demands in exchange for Greece's support for the declaration.

Not blocking treaty

A Greek government official denied that Athens intended to block the treaty and said it was making suggestions as part of a dialogue on the issue.

"The Greek government, in the framework of the preparatory discussions ahead of the anniversary Summit, underlined the need for the Rome declaration to be enriched in order to highlight the importance of the European Social Model, which includes the protection of workers," a Greek government document said.

On Monday, Eurogroup head Jeroen Dijsselbloem said that bailout talks between Greece and its eurozone creditors will intensify but there is no certainty of a quick deal.

Differences remain wide on unlocking the latest tranche of cash for Athens from its $91 billion bailout agreed in 2015.

"A lot of work has been done and progress made, but still some issues remain," Dijsselbloem said after discussions with finance ministers of the 19-nation eurozone.

Athens needs the latest tranche of bailout cash to meet $7.57 billion of new debt payments in July or risk defaulting on its loans.

TRTWorld and agencies