Creditors putting Greece in impossible position, Varoufakis says [Update]

Demands for tax increases and pension cuts that Greece’s creditors are setting as conditions for the disbursement of aid are putting the country in an impossible position, its Finance Minister said on Friday.

“I am against increasing the corporate tax, but then again I am against raising the tax on hotels and against cutting the pensions of people who live below the poverty line,” Yanis Varoufakis said on Irish national radio RTE.

“These issues are putting me and my government in an impossible position, having to make a bad choice among really hard, difficult bad choices.”

On Thursday, Greece again failed to clinch a cash-for-reforms deal with creditors, setting up a last-ditch effort on Saturday to avert a default next week or start preparing to protect the euro zone from financial turmoil.

Varoufakis said that, while Greece was determined to remain part of the eurozone, it would not sign any agreement with creditors that he considered “unviable”.

Asked whether Greece was still facing demands that he could not agree to, Varoufakis said “Absolutely, absolutely.”

“The Greek side has bent over backward to accommodate some rather strange demands by the institutions. It is now up to them to come to the party,” he said.

The austerity package being imposed on Greece would destroy its chance of growth and make it much harder for the country to repay its debts, he said.

“So when I am asked to put my signature at the bottom line of an agreement which is clearly unviable, I am not going to do this,” Varoufakis said.

[Reuters]