ATHENS, Feb 7 — Greek political leaders face crunch talks today to hammer out a deal on unpopular reforms that have prompted the country’s biggest labour unions to walk off the job.
Failure to strike a deal to secure the €130-billion (RM514 billion) rescue risks pushing Athens into a chaotic debt default that could threaten its future in the euro zone.
In some euro zone countries, including Germany and Finland, parliamentary approval is required to raise the bailout money.
In Paris, German Chancellor Angel Merkel yesterday expressed the exasperation among euro zone leaders at seemingly endless arguing in Athens that has yet to produce a definitive acceptance of the austerity and reform demanded by the lenders.
“I honestly can’t understand how additional days will help,” she said at a news conference with French President Nicolas Sarkozy. “Time is of the essence. A lot is at stake for the entire euro zone.”
But leaders of the three parties in the coalition government appeared to need at least one additional day.
The office of Prime Minister Lucas Papademos, a former central banker who heads a government of politicians, said that a meeting of leaders from the conservative, socialist and far-right parties due yesterday had been postponed to today.
No reason was given for the delay. Papademos held further talks with the “troika” of lenders — the European Commission, ECB and IMF — yesterday.
The party leaders, positioning themselves for a likely general election in April, have balked at accepting another package of deeply unpopular wage and pension reductions, job cuts and tougher tax enforcement measures.
Demonstrations are planned in central Athens.
Patience wearing thin
Greeks watched the political drama with the same angry exasperation they have shown throughout the nation’s nearly three-year crisis, mixed with fear of the consequences of leaving the euro.
“We are stuck between a rock and a hard place,” said Kosmas Georgiou, a 31-year old company inspector. “We are lost either way but political leaders have to agree. Going back to the drachma is not an option, it’s disaster.
“They are delaying this just to look like heroes.”
Merkel made clear that her patience was wearing thin on a deal that affected not only Greece but the wider currency bloc, which fears that a default would hit much larger economies such as Spain and Italy.
One government official said the entire Greek side had to agree terms of the rescue — which would be the second for Athens since 2010 — with international lenders before the next meeting of the Eurogroup of euro zone finance ministers.
No date has been set for the Eurogroup meeting, and a European Commission spokesman said it would be held only when Greece had made a commitment to the deal.
Papademos said after five hours of talks on Sunday that party chiefs had agreed to measures including wage cuts and other reforms as part of spending cuts worth 1.5 per cent of gross domestic product.
But leaders of the PASOK socialist party, the conservative New Democracy and the far-right LAOS party still have to reach agreement on several unresolved issues. These include labour market reform and shoring up domestic banks.
Greece needs the bailout money by mid-March to meet big debt repayments but tempers are rising in the EU over what it sees as the Greeks dithering on implementing reforms.
Greeks have been worn down by a deep recession, now in its fifth year, and wave after wave of austerity measures imposed under the first bailout. — Reuters
