ATHENS — Greek Prime Minister Alexis Tsipras told skeptical lawmakers in his left-wing government he had rejected demands from creditors to impose new austerity measures worth 1.8 billion euros ($2 billion), as the country’s financial fate continued to unsettle world markets.
Speaking in Parliament, Tsipras turned on bailout lenders from the Eurozone and the International Monetary Fund, accusing them of insisting on imposing a “failed program.”
Tsipras has so far failed to reach an agreement with creditors to release the remaining 7.2 billion euros ($8.2 billion) in its bailout program. The country faces default at the end of the month, when it will have to repay 1.6 billion euros ($1.8 billion) in debts.
The latest cuts demanded by lenders, Tsipras said, concerned pensioners, who have already been “brought to their knees”
“It appears this is a show of strength aimed at killing any effort to counter austerity … It’s an issue that does not only concern Greece but all the peoples of Europe,” he said.
The continued uncertainty caused a second day of heavy losses on the Athens Stock Exchange, whose main index was down more than 4 percent. Germany’s DAX was as much as 1 percent lower, amid wider European losses.
Greek state borrowing costs also continued to rise — a sign investors fear default. The yield on the country’s two-year-bond neared 30 percent.
Elected on an anti-austerity platform in January, Tsipras is having trouble convincing skeptics in his coalition government to back a compromise deal with creditors that would likely see an extension of bailout taxes that he had repeatedly promised to abolish.
Dissenters within the main SYRIZA party — some openly seeking a break with lenders and return to national currency — have organized anti-austerity rallies in Athens June 17.
In Berlin, German Chancellor Angela Merkel promised “full concentration” on efforts to reach a deal. “I see my task in that, and I have said time and again that I would like to do everything that is possible to keep Greece in the Eurozone,” she said. “And I am applying myself to this task.”
Germany’s Bild newspaper quoted Greek Finance Minister Yanis Varoufakis as saying he wasn’t planning to present anything new at a June 18 meeting of the Eurozone’s 19 finance ministers — earlier billed as potentially decisive in the stand-off over Greece’s stalled bailout.
“‘The time is certainly getting very, very short,” said Jeroen Dijsselbloem, the Dutchman who acts as the Eurozone’s top finance official. “Since the talks were suspended on Sunday, I don’t think there has been a lot of development.”
Tsipras on June 16 met with the leaders of two opposition parties who offered his government help in the bailout negotiations. The parties — the centrist Potami and Socialist PASOK — have a combined bloc of 30 seats in parliament.
Mujtaba Rahman, of the New York-based risk consultancy Eurasia Group, said tension between Greece and lenders could help Tsipras sell a compromise to his party.
“We continue to believe pressure on Tsipras from within SYRIZA will dissipate if he is seen to bring home the best possible political deal,” the group’s Mujtaba Rahman said. “But time is close and the risk of worst case scenarios is certainly increasing.”
By Derek Gatopoulos and Geir Moulson. AP writer Raf Casert in Brussels contributed