Mon, Nov 07, 2011 - Page 1 News List

Greek leaders still in talks to stave off bankruptcy


Greek leaders entered a second day of closed-door political talks yesterday and were under intense pressure to ensure that the country doesn’t go bankrupt in the next few weeks and remains in the eurozone.

The Socialist government of Greek Prime Minister George Papandreou, who narrowly survived a parliamentary confidence vote early on Saturday, said it has started talks to form a temporary coalition to run the country for the next four months. The government was also scheduled to hold a Cabinet meeting at 2pm GMT.

Papandreou, mid-way into a four-year term, has promised early elections by March and has said he would be prepared to step aside.

However, conservative leader of the main opposition New Democracy party, Antonis Samaras, said yesterday no talks between the two parties were taking place and reiterated his stance that Papandreou must resign before any coalition discussions can take place.

Samaras made his latest comments after a brief meeting with Greek President Karolos Papoulias, a mainly ceremonial figure who has called for collaboration between the two main parties.

Greece has been surviving since May last year on a first 110 billion euro (US$151.6 billion) bailout. However, its financial crisis was so severe that a second rescue was needed as the country remained locked out of international bond markets by sky-high interest rates and facing an unsustainable national debt increase.

The new EU deal, agreed on by the 27-nation bloc on Oct. 27 after marathon negotiations, would give Greece an additional 130 billion euro in rescue loans and bank support. It would also see banks write off 50 percent of Greek debt, valued at about 100 billion euro. The goal is to reduce Greece’s debts to the point where the country is able to handle its finances without relying on bailouts.

Greece’s lawmakers must now approve the new rescue deal, putting intense pressure on the country’s leaders to swiftly end the political crisis so parliament can convene and put the debt agreement to a vote.

“In these critical moments, the two [main] parties are merely wasting time,” lawmaker Giorgos Kontoyannis said.

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