Greece on a 'knife-edge' as bailout deadline nears: Evangelos Venizelos
European Union INTERNATIONAL MONETARY FUND European Central Bank civil service Lucas Papademos EU-IMF bailout
Greek prime minister Lucas Papademos summoned political allies to an emergency meeting on Sunday after hours of negotiations with EU-IMF bailout.
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The Economic Times
Synopsis

Greek prime minister Lucas Papademos summoned political allies to an emergency meeting on Sunday after hours of negotiations with EU-IMF bailout.

ATHENS: Greek prime minister Lucas Papademos summoned political allies to an emergency meeting on Sunday after hours of negotiations with EU-IMF bailout auditors failed to produce a rescue deal. An accord has to emerge on Sunday for Greece to avert a disorderly default in March, finance minister Evangelos Venizelos warned ahead of the meeting.

"Everything must be concluded by (Sunday) night... so that we can be within the timetable given the bond maturities in March," said Venizelos after euro zone ministers bluntly told him they were ready to abandon Greece without proof it could push through painful cuts.

Euro zone finance ministers told Greece it could not go ahead with an agreed deal to restructure privately held debt until it guaranteed to implement reforms to secure a second financing package from the euro zone and the IMF.

Athens has been in talks with the European Union, the International Monetary Fund and the European Central Bank - known as the 'trioka' here - on further action needed to unlock a new euro zone rescue deal worth 130 billion, or $171 billion, pending since October. Pressure is also mounting for an agreement with private lenders to wipe out part of the 350-billion Greek debt, as Athens faces loan repayments of 14.4 billion, or $19 billion on March 20.

A senior government official on Sunday said "superhuman" negotiations with auditors from the troika had made progress but that certain gaps remained. Chief among them is the public creditors' demand for labour cost cuts, rejected by unions and by the three-party coalition backing Papademos' government.

Opponents argue further reductions will exacerbate a recession fuelled by two years of austerity. "Agreement by the political leaders is necessary," the official said.

George Karatzaferis, whose LAOS party is one of the coalition's three partners, on Saturday threatened to reject the euro zone bailout deal. "I do not function well under conditions of blackmail," he said. Papademos has reportedly threatened to resign if his coalition backers reject the austerity measures.

Coalition leaders are opposed to further civil service cuts, now reportedly affecting teachers and military staff and for a reduction in the minimum monthly wage whichstands at 750.

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