Deadlock in Greece austerity talks

 
10 April 2012

A crucial meeting between Greece's prime minister and debt inspectors on averting the country's bankruptcy has ended with no definite results.

Finance Minister Evangelos Venizelos said the main point of contention - cuts in pensions - has not been resolved.

He said there must be an agreement before a planned meeting of eurozone finance ministers.

Mr Venizelos is leaving for Brussels, with finance ministers scheduled to meet later. It appears likely that another meeting of the three political leaders whose parties back Greece's coalition government is to be held.

Mr Venizelos said Greece's "survival over the coming years" depends on the new programme of financial aid and the completion of a debt swap agreement with private creditors that would slash Greece's debt load.

"It will determine whether the country remains in the eurozone or whether its place in Europe will be endangered," he said. "There is no room for any other expediency: we must look Greeks in the eye, look at the national interest and the interest of our children."

Representatives of the so-called "troika" of Greece's creditors - the European Union, the European Central Bank and the International Monetary Fund - arrived to negotiate with prime minister Lucas Papademos, Mr Venizelos and Labour Minister Giorgos Koutroumanis over the main point of contention: the troika's demand for substantial cuts in supplementary pensions.

The issue that has threatened to derail the talks concerns cuts of about 300 million that must be made so Greece can reach its fiscal targets for 2012. At stake is a 130 billion bailout that will stave off Greece's bankruptcy.

No time has been yet set for a meeting of Mr Papademos with the three political leaders - socialist George Papandreou, conservative Antonis Samaras and right-wing populist George Karatzaferis. It is the latter two who have raised the most objections over the pension cuts.

Yesterday, Mr Papademos and the three political leaders had met for seven and a half hours and had accepted all the other demands of the troika, including a 22% cut in the minimum wage and firings of civil servants.

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