With eyes on the near-empty state coffers, the government is seeking a solution for the country’s economic woes. Deputy PM Giannis Dragasakis on Tuesday night began drawing up the blueprint for the first bills to be discussed in Parliament in May prior to an agreement (or not) with the country’s international creditors. A number of the measures are “painless” with measures such as the independence of the revenue administration office and recovery measures such as a tax on overnight stays at hotels. Single VAT tax continues to be a “hot potato” with creditors seeking at least 18% or more.

Ministers at the Radical Left Coalition (SYRIZA) cabinet meeting on Tuesday complained that they have compromised as much as possible whereas some spoke of a possible “rift” in negotiations if there is more pressure. The non-payment of the 900-million-euro installment to the International Monetary Fund on June 5 and June 12 has not been excluded.

“Don’t expect an agreement or rift right now,” said a government source. “It will come at the eleventh hour, following the conclusion of the meeting. And, based on current data, the ‘eleventh hour’ is very close to two weeks (end of May) set by Brussels by Finance Minister Yanis Varoufakis following the Eurogroup meeting.”

Time is running out for state funds. Public wages worth 600 million euros will be paid on Thursday, and another 1.1 billion euros for wages and pensions by the end of the month. For the government to make good on its dues to employees there has been a delay in payments worth 2.5-3 billion euros to private suppliers since the start of the year (7 bln euros in total) as well as non-payment of tax refunds. This tactic has caused private companies to terminate their collaboration with the public sector and has resulted in a number of private sector employees to remain unpaid or be dismissed. 

On his part, Finance Minister Yanis Varoufakis briefed Prime Minister Alexis Tsipras on the pressure exerted by Eurozone ministers for VAT increases as well as labor and social security changes.