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Greek leaders fail to strike reforms deal

Athens , February 9, 2012

Greek leaders failed on Thursday to agree on reforms and austerity measures needed to secure a bailout to avoid a messy default, forcing Finance Minister Evangelos Venizelos to go to the country's financial backers with an incomplete deal.

Athens' partners in the European Union and the International Monetary Fund are increasingly exasperated by a lack of agreement on the measures they demand in return for a 130 billion euro ($172 billion) bailout and time is running out for Greece before a major March 20 bond redemption.

Euro zone officials say the full package must be agreed with Greece and approved by the EU, IMF and European Central Bank by February 15 so legal paperwork can be completed in time to avoid a chaotic default that may threaten the global economic recovery.

But after repeated delays and all-night talks with leaders of the three Greek coalition parties and chief EU and IMF inspectors, Venizelos emerged shortly before dawn to say that one issue was unresolved.

"I am leaving for Brussels in a short while with the hope that the Eurogroup meeting will be held, and a positive decision on the new programme will be taken," he told reporters.

"The financial survival of the country in the coming years depends on the new programme ... It is a time of responsibility for everyone."

Greece's two major labour unions called a 48-hour strike for Friday and Saturday against the reforms that the party chiefs managed to agree on.

"The painful measures that create misery for the youth, the unemployed and pensioners do not leave us much room," secretary general of the ADEDY union, Ilias Iliopoulos, told Reuters.

"We won't accept them. There will be a social uprising."

Venizelos had hoped to present to his fellow euro zone finance ministers in Brussels a fully-fledged deal on a new bailout plan, including a commitment for 3.3 billion euros in budget cuts this year.

Prime Minister Lucas Papademos said earlier he hoped the party leaders could sort out their differences before euro zone finance ministers meet at 1700 GMT.
Before then, all eyes will be on what the ECB is willing to do to help Greece at its monthly policy meeting.

A senior government official said the party chiefs had agreed on how to make about 90 percent of the promised savings, leaving a relatively small hole in the calculations. The stumbling block appeared to be pension reductions.

Athens had to close this gap quickly, said the official. "Greece has another 15 days to specify fiscal savings worth 300 million euros," he said on condition of anonymity.

International lenders are demanding that the party leaders commit themselves in writing to implement the programme of pay and pension cuts, structural and administrative reforms.

However, the leaders have been loath to accept the lenders' tough conditions, which are certain to be unpopular with voters. They face parliamentary elections possibly as early as April.  - Reuters




Tags: Greece | reforms | debt | lending | Greek |

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