Greek leaders faced crunch talks yesterday to agree on unpopular reforms to secure a 130 billion euro (US$170 billion) bailout and avert a chaotic debt default which could threaten its future in the eurozone.
The leaders are caught between their increasingly frustrated partners in the EU for failing to pass the reforms quickly and workers who went on strike yesterday to protest against the austerity measures.
EU officials say the full package must be agreed with Greece and approved by the eurozone, European Central Bank (ECB) and IMF before Feb. 15 to allow time for complex legal procedures involved in the bond swap to be completed in time for a March 20 bond redemption.
In some eurozone countries, including Germany and Finland, parliamentary approval is required to raise the bailout money.
In Paris, German Chancellor Angel Merkel on Monday expressed the exasperation among eurozone leaders at seemingly endless arguing in Athens that has yet to produce a definitive acceptance of the austerity and reform demanded by the lenders.
“I honestly can’t understand how additional days will help. Time is of the essence. A lot is at stake for the entire eurozone,” she told a news conference with French President Nicolas Sarkozy.
However, leaders of the three parties in the coalition government appeared to need at least one additional day.
The office of Greek Prime Minister Lucas Papademos, a former central banker who heads a government of politicians, said that a meeting of leaders from the conservative, socialist and far-right parties due on Monday had been postponed to yesterday.
No reason was given for the delay. Papademos held further talks with the “troika” of lenders — the European Commission, ECB and IMF — on Monday.
Alarmed by the prospect of yet more budget cuts, Greece’s two main trade unions said they would hold a 24-hour strike yesterday in protest against policies they say have only driven the economy into a downward spiral.
Demonstrations were held in central Athens.
Greeks watched the political drama with the same exasperation they have shown throughout the nation’s nearly three-year crisis, mixed with fear of the consequences of leaving the euro.
“We are stuck between a rock and a hard place. We are lost either way, but political leaders have to agree,” said Kosmas Georgiou, a 31-year old company inspector.
“Going back to the drachma is not an option, it’s disaster,” he added.
“They are delaying this just to look like heroes,” he said.
Merkel made clear that her patience was wearing thin on a deal that affects not only Greece, but the wider currency bloc, which fears that a default would hit much larger economies such as Spain and Italy.
One government official said the entire Greek side had to agree terms of the rescue — which would be the second for Athens since 2010 — with international lenders before the next meeting of the Eurogroup of eurozone finance ministers.
No date has been set for the Eurogroup meeting.
A European Commission spokesman said it would be held only when Greece had made a commitment to the deal.