Greece crisis bailout talks delayed
The Greek Prime Minister is struggling to get coalition party leaders to buy-in to harsh new international bailout terms. The country must now accept even more painful cuts if it’s to get a 130 billion Euro second lifeline from international creditors. If the deal falls through Greece is expected to default by the end of March. Professor of constitutional law George Katroungalos says measures imposed by the EU aim at selling Greece’s basic infrastructure to Germany.
Greece is set to continue talks with international authorities over cuts being demanded in exchange for crucial bailout funds.
However, negotiations between coalition parties on the austerity measures, which broke down on Sunday, have been delayed until Tuesday.
Athens needs the 130bn euros (£108bn; $171bn) of funds and help from private lenders to avoid a debt default.
French President Nicolas Sarkozy said time was running out for a deal.
Speaking after a meeting with German Chancellor Angela Merkel, President Sarkozy urged Greek political leaders to agree to reforms, saying the crisis had to be solved "once and for all".
"Greece's leaders have made commitments and they must respect them scrupulously," he told a press conference.
"Europe is a place where everyone has their rights and duties. Time is running out, it needs to be concluded, it needs to be signed."
Athens faces loan repayments to private lenders of 14.4bn euros on 20 March which it currently cannot afford to pay.
A European Commission spokesman said Greece was already "beyond the deadline" to end the talks.
Austerity measures
Talks on Sunday between Greek PM Lucas Papademos and the leaders of his three-party coalition over new austerity measures ended without full agreement.
The measures include:
- Further government spending cuts equal to 1.5% of GDP
- Re-capitalisation of Greek banks - whilst retaining their independence
- Reducing labour costs, including a cut in the minimum wage and holiday bonuses
- Further civil service job cuts
- Cuts to the size of pension programmes
The Greek Prime Minister is struggling to get coalition party leaders to buy-in to harsh new international bailout terms. The country must now accept even more painful cuts if it's to get a 130 billion Euro second lifeline from international creditors. If the deal falls through Greece is expected to default by the end of March. Professor of constitutional law George Katroungalos says measures imposed by the EU aim at selling Greece's basic infrastructure to Germany.
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On Sunday, the prime minister's office said that some agreement had been reached in some areas. But there were disagreements over the size of job cuts, cuts to the minimum wage, pension cuts and the ending of a so-called 13th or 14th month's pay as a holiday bonus.
The talks between the parties had been expected to reconvene on Monday, with signs emerging of movement on some of the more contentious issues.
Government sources told the BBC's Athens correspondent, Mark Lowen, that there was the outline of an agreement on cutting the minimum wage, currently about 750 euros a month, by 20%. Holiday bonuses that had been under threat, would be kept, the sources suggested.
Mr Papademos will meet representatives of the European authorities and the International Monetary Fund later.
It is hoped that the text of a final agreement on reforms will be distributed to party leaders on Monday night or Tuesday morning, giving them time to consult with their MPs before meeting the prime minister to sign off on the deal.
Employees from public and private sector unions in Greece hold a protest march against further austerity measures. International inspectors are due in Athens this week to discuss a crucial second bailout for Greece and they say Greece's labor force must become more competitive and flexible.
Greece is being pressured to give all control of the Greek budget to the European Union, which it says threatens its national sovereignty.
Strikes
Unions and employers' groups have resisted pay cuts, with the two largest unions calling for a day-long strike on Tuesday.
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Employees from public and private sector unions in Greece hold a protest march against further austerity measures. International inspectors are due in Athens this week to discuss a crucial second bailout for Greece and they say Greece's labor force must become more competitive and flexible.
Thousands of angry Greek workers filled the streets of Athens on Tuesday as part of a 24-hour walkout against government austerity measures.
The protest was held as European Union and International Monetary Fund inspectors were due back in the capital for discussions on a second bailout for Greece.
Many public and private sector workers have been hard hit by tax hikes and spending cuts which were part of a first bailout agreed in 2010.
They fear more austerity and wage cuts with the second bailout and say they cannot take any more belt-tightening.
[Kostas Tsikrikas, President of the Confederation of Civil Servants]:
"We demand another policy that will support the worker, that will be humane and will concentrate on his needs, that it will respect labour laws and does not bow to speculators and markets."
The EU, IMF and European Central Bank inspectors -- known as the troika -- who are expected back in Athens as early as this week, say the private sector labour force must become more flexible to increase Greece's competitiveness.
The latest review plays a key role in Greece receiving the second package of financial aid, which it needs to keep from going bankrupt.
Measures also include opening several professions up to more competition.
Until now private sector wages have been untouched by the government's austerity measures - but jobs in the private sector have been lost and some employers have cut wages independently.
[Dimitris Margaritos, Museum Employee]:
"If we do not unite we will not succeed in having a solution that we want, not the one they want."
The EU and IMF inspection aims to aid Greek efforts to agree on a deal with banks to slash its debt of over 4.5 billion dollars U.S. by more than a third.
Talks broke down last week over the interest rate on new bonds Greece will offer and a plan to enforce investor losses.
Negotiations are expected to continue on Wednesday.
Iannis Panagopoulos, leader of the GSEE private-sector union, was reported as saying proposed 20-30% cuts in private sector wages "chronicle a pending death".
Anti-austerity protests are also expected to take place on Monday evening.
The discussions come as the EU's statistics office reported Greece's debt spiked to 159.1% of gross domestic product in the third quarter of 2011 - up from 138.8% a year earlier and 154.7% in the second quarter.
Unless Greece promises to implement reforms, the eurozone ministers say Greece will not be able to go ahead with a plan to restructure its privately-held debt.
Eurozone finance ministers had hoped to meet on Monday to finalise the bailout - Greece's second - but that meeting has been delayed.
Greece has prepared a debt plan with private creditors to more than halve the value of Greek debt and in return receive new, 30-year bonds with an average interest rate of less than 4%.
The restructuring is designed to help cut Greek debt to 120% of GDP by 2020, a level viewed as sustainable by some economists.
Greece is being pressured to give all control of the Greek budget to the European Union, which it says threatens its national sovereignty.