Greek PM implores cooperation to secure US$171b rescue plan
Source: Agencies |
February 6, 2012, Monday
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GREECE'S prime minister scrambled yesterday to convince lenders and politicians to sign off on a 130 billion euro (US$171 billion) rescue, after his finance minister said just hours remain before the eurozone abandons the country to its fate.
A technocrat appointed in November, Prime Minister Lucas Papademos is trying to ensure cash-strapped Greece avoids sinking into a chaotic default when big bond redemptions come due next month.
His finance minister said Athens had only until Sunday night to clinch a second financing package from lenders, after eurozone ministers bluntly told him they were ready to abandon Greece without proof it could push through painful cuts.
"We are on a knife edge," Finance Minister Evangelos Venizelos said on Saturday after what he called a "very difficult" conference call with eurozone counterparts.
"The moment is very crucial."
Papademos's first mission yesterday was to agree at least a preliminary deal with the "troika" of foreign lenders on reforms included in the bailout, after several days of talks failed to resolve the thorny issue of cutting wages and spending.
Greek officials have emerged increasingly despondent after each round of talks, complaining that the European Central Bank, European Union and International Monetary Fund troika were stubbornly refusing to yield on demands to cut the minimum wage level, axe holiday bonuses and fire public sector workers.
Papademos then faces an even tougher task convincing party chiefs in his own national unity coalition to back the reforms demanded by the lenders at the risk of ruining their chances at national elections expected in April.
He was to meet the lenders before huddling with the socialist, conservative and far-right party leaders in his coalition late yesterday.
The conservative New Democracy and the far-right LAOS party in particular have staunchly opposed further wage and spending cuts, arguing that risks pushing Greece into an even deeper recession and imposing more pain on struggling Greeks.
"The truth is that people are tired. They can't put up with more austerity," New Democracy spokesman Yannis Michelakis told the Real News weekly.
LAOS leader George Karatzaferis rejected what he called the "ultimatum" to strike a deal yesterday.
Papademos's government implored them to be more cooperative.
"We have carried out superhuman negotiations. And so political leaders must help us now," a senior government official said.
Greece's lenders, who want spending cuts worth about 1 percent of GDP - or above 2 billion euros - this year, have demanded all political leaders endorse the cuts irrespective of the outcome at the polls.
A technocrat appointed in November, Prime Minister Lucas Papademos is trying to ensure cash-strapped Greece avoids sinking into a chaotic default when big bond redemptions come due next month.
His finance minister said Athens had only until Sunday night to clinch a second financing package from lenders, after eurozone ministers bluntly told him they were ready to abandon Greece without proof it could push through painful cuts.
"We are on a knife edge," Finance Minister Evangelos Venizelos said on Saturday after what he called a "very difficult" conference call with eurozone counterparts.
"The moment is very crucial."
Papademos's first mission yesterday was to agree at least a preliminary deal with the "troika" of foreign lenders on reforms included in the bailout, after several days of talks failed to resolve the thorny issue of cutting wages and spending.
Greek officials have emerged increasingly despondent after each round of talks, complaining that the European Central Bank, European Union and International Monetary Fund troika were stubbornly refusing to yield on demands to cut the minimum wage level, axe holiday bonuses and fire public sector workers.
Papademos then faces an even tougher task convincing party chiefs in his own national unity coalition to back the reforms demanded by the lenders at the risk of ruining their chances at national elections expected in April.
He was to meet the lenders before huddling with the socialist, conservative and far-right party leaders in his coalition late yesterday.
The conservative New Democracy and the far-right LAOS party in particular have staunchly opposed further wage and spending cuts, arguing that risks pushing Greece into an even deeper recession and imposing more pain on struggling Greeks.
"The truth is that people are tired. They can't put up with more austerity," New Democracy spokesman Yannis Michelakis told the Real News weekly.
LAOS leader George Karatzaferis rejected what he called the "ultimatum" to strike a deal yesterday.
Papademos's government implored them to be more cooperative.
"We have carried out superhuman negotiations. And so political leaders must help us now," a senior government official said.
Greece's lenders, who want spending cuts worth about 1 percent of GDP - or above 2 billion euros - this year, have demanded all political leaders endorse the cuts irrespective of the outcome at the polls.
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