Greek leaders in debt talks

Greek Prime Minister Lucas Papademos was locked in talks with coalitionleaders last night to secure approval for radical budget cuts and a debt deal to avert default.

The socialist, conservative and far-right leaders must approve reported cuts to the minimum wage – strongly resisted by unions – in addition to pension reductions and 15,000 civil service redundancies.

“I am troubled by the innermost intentions of our creditors,” far-right leader George Karatzaferis told reporters on his arrival at the premier’s official residence, adding that a pressing schedule was being used to “blackmail” Greece.

The meeting of Papademos with party leaders backing his government, repeatedly postponed since Sunday, finally kicked off around 4 p.m. and was continuing late into the night.

Agreement on new measures demanded by the EU, the IMF and the European Central Bank – known as the ‘troika’ – and on a debt-write down by banks would open the way for a second rescue and so close a key chapter in the eurozone crisis.

The party heads earlier in the day received a 50-page text with the austerity cuts demanded in return for new loans under a €130 billion eurozone bailout originally agreed in October.

The text was drawn up during a night of marathon talks between Papademos and representatives from the troika aimed at setting up a second rescue for Athens following an initial bailout worth €110 billion in May 2010.

Press reports have said that the latest measures, reportedly tweaked up to the last minute, include a cut of 22 per cent in the minimum wage and 15-per cent cuts in complementary pension programmes, along with a separate 15-per cent reduction for public utility pensioners.

About 15,000 Greek public sector jobs are thought likely to be axed.

A Mega TV commentator said the coalition leaders had found the deal “much tougher than they had expected”.