Greece crisis talks coming

Crisis talks on a debt deal for Greece among the three leaders of parties supporting the coalition government were suspended and will continue today.

ATHENS — Crisis talks on a debt deal for Greece among the three leaders of parties supporting the coalition government were suspended and will continue today.

Greece is racing to finalize austerity reforms needed for a new C130 billion ($171 billion) bailout without which it would face bankruptcy in late March. But in a country deep in recession, with unemployment at 19 per cent, many politicians and unions oppose more austerity measures.

The three party leaders held a five-hour meeting late Sunday with Prime Minister Lucas Papademos to hammer out a deal with debt inspectors representing eurozone countries and the International Monetary Fund, but failed to reach an agreement.

An announcement from Papademos’ office said the three had agreed on measures to cut spending in 2012.

The cuts would be 1.5 per cent of gross domestic product — about C3.3 billion ($4.3 billion) — improve competitiveness by cutting wages and non-wage costs, such as social security contributions, reduce auxiliary pensions and re-capitalize banks without nationalizing them.

But the three leaders — socialist George Papandreou, Antonis Samaras of conservative New Democracy and Giorgos Karatzaferis of the rightist Popular Orthodox Rally — differed as to what this would mean in detailed proposals. All three have called meetings of their party executives to consider the proposals.

Samaras said upon leaving the talks that Greece’s creditors “are asking for more recession which the country cannot bear. I am fighting, with all my means, to prevent this.”

“I will not contribute to the breakout of a revolution by the new poor that will consume the whole of Europe,” Karatzaferis said.

Papandreou objects to cutting actual wages and wants the state to take over banks, at least temporarily.

“Political party leaders are obliged to provide a first response to the proposals by” Monday morning, socialist party spokesman Panos Beglitis told reporters after the party leaders’ meeting with Papademos.

Papademos has resumed talks with representatives of the “troika” of Greece’s creditors — the European Union, the European Central Bank and the International Monetary Fund — later Sunday and will be joined by Finance Minister Evangelos Venizelos and Labor Minister Giorgos Koutroumanis.

Unions and employers’ associations have warned that private-sector wage cuts would deepen the nation’s recession, now in its fourth year.

Papademos and Venizelos also met separately with representatives of banks in an effort to complete a bond swap deal that would reduce Greece’s debt by C100 billion ($131.6 billion). The talks involved Charles Dallara, managing director of Washington-based Institute of International Finance (IIF), and Jean Lemierre, senior adviser to the chairman of French bank BNP Paribas.

Josef Ackermann, the CEO of Germany’s Deutsche Bank and the IIF’s board chairman, is also in Athens.

About 60 people gathered outside parliament Sunday evening to protest what they view as the political leaders’ readiness to make concessions to the creditors. When they tried to block traffic, they were pushed back by police using tear gas.

Communist-affiliated unionists are holding a protest rally and march Monday.

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