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Paul Murphy accuses Michael Noonan of 'stabbing the Greek people in the chest'

… and the Irish people in the back.

Paul Murphy
Paul Murphy
Image: PA Wire/Press Association Images

Updated: 4.12pm

PAUL MURPHY HAS accused Finance Minister Michael Noonan of abandoning the Greek people during the country’s “economic and humanitarian crisis”.

The Anti-Austerity Alliance was responding to reports Noonan was among those who pressed for emergency financial support for Greek banks to be stopped unless capital controls are imposed.

During Leaders’ Questions today, Murphy said Noonan “stabbed the Greek people in the chest and, in so doing, he stabbed the Irish people in the back”, adding that a debt writedown deal for Greece would also be good for Ireland.

Murphy stated that the “unelected, unaccountable” European Central Bank has “a noose around the neck of the Greek economy” and Noonan and German Finance Minister Wolfgang Schaeuble lined up to say “tighten the noose”.

Enda Kenny rejected this and accused Murphy of operating based on speculation.

He said there is “unanimous” agreement among European leaders that a Greek exit from the eurozone is not the preferred outcome.

The Taoiseach added that Greek prime minister Alexis Tsipras told the meeting he “wants his country to be able to pay its way and to contribute and, under no circumstance, to leave the eurozone”.

Concessions

In order to strike a deal, Greece plans to raise corporate and consumption taxes under a last-minute deal to unlock another tranche of bailout money before it runs out of cash next week.

But despite the country and its creditors being the closest they have been to striking an agreement, the two sides remain at loggerheads over cuts to spending and welfare.

EU finance ministers are being called back to talks tomorrow after there was no resolution from the latest round of negotiations with Greek officials.

Leaders from the anti-austerity Syriza party have been trying to get the last €7.2 billion in funds due under the country’s €240 billion bailout.

Greece’s next loan repayment of €1.5 billion is due at the end of the month and it has already warned it won’t be able to make the deadline without more bailout money.

That would put the country in default and could lead to it eventually being booted out of the eurozone.

Prime Minister Alexis Tsipras yesterday said the “ball is now in the court of the European authorities” after putting on the table his government’s latest proposals.

Europe Greece Bailout Greek Prime Minister Alexis Tsipras Source: AP Photo/Geert Vanden Wijngaert

Red-line issues

He has insisted pension cuts or VAT increases were red-line issues that his anti-austerity government wouldn’t accept.

Any Greek deal with still have to pass the country’s parliament, where it risks being shot down in the event of major concessions.

However the Financial Times reported Athens was looking at new savings in its pensions system that would shave over 1% of the country’s GDP off its spending next year.

Greece Bailout Source: AP Photo/Daniel Ochoa de Olza

The plan still falls short of the 1% cut creditors want this year, while the sides are also at a deadlock about lifting VAT on essentials like electricity and food.

The country has accepted some concessions on the consumption tax but its creditors want the revenue raising to go further, AFP said.

Greece’s bailout lenders have suggested hiking VAT rates on hotels and restaurants from 13% to 23%, arguing those were luxuries that relied heavily on foreign tourists.

However there has already been push-back at the suggestion. Thanassis Papanikolaou, the head of the country’s association of restaurant chains, told Kathimerini:

We have the experience from 2011 when the increase from 13 to 23% in food service brought the shut-down of 4,500 enterprises and the loss of 40,000 jobs.”

Greece Bailout Source: AP Photo/Petros Giannakouris

‘Closer than ever before’

Greece has instead focussed its plans on higher returns from corporate taxes and employer contributions, which puts it at odds with creditors who are worried the moves would put the brakes on an economic rebound.

European Commission President Jean-Claude Juncker said of the talks: “We are closer than we ever were before”.

The ECB has also lifted the amount of emergency cash available to Greek banks for the second time in two days. Greeks have pulled an estimated €4 billion out of the country’s banks in the immediate lead-up to the bailout talks.

- With reporting by Órla Ryan and AFP

READ: ‘Unexpected developments’ in Greece are the biggest risk to Ireland’s recovery >

READ: Greek minister: Irish people’s feelings of mild superiority are unhelpful >

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About the author:

Peter Bodkin  / Editor, Fora

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