Under intense pressure from bailout creditors, Greek party leaders were seeking a long-delayed agreement on harsh cutbacks demanded to avoid looming bankruptcy, as a general strike disrupted public services nationwide today.
Heads of the three parties backing the interim government will confer with Prime Minister Lucas Papademos on new income cuts and job losses, which Greece's eurozone partners and the International Monetary Fund are demanding to keep the country's vital rescue loans flowing.
A general strike against the impending cutbacks stopped train and ferry services nationwide, while many schools and banks were closed and state hospitals worked on skeleton staff.
Unions were planning two separate protest marches in central Athens, which will be closely policed as previous demonstrations over the past two years of economic pain have turned violent. In May 2010, three workers died in an Athens bank torched by rioters.
Yesterday, Mr Papademos's government caved in to demands to cut civil service jobs, announcing that 15,000 positions would go this year, out of a total of 750,000.
The decision breaks a major taboo, as state jobs had been protected for more than a century to prevent political purges by governments seeking to appoint their supporters.
The EU and IMF are also pressing Greece to deeply cut the 751 euros minimum wage, which can lead to knock-on reductions in private sector salaries and even unemployment benefits. Unions and employers' federations have deplored the measure as unfair and unnecessary.
In the private sector, unemployment has hit a record high of more than 19% amid a fifth year of recession.
Athens must placate its creditors to clinch a 130 billion euro bailout deal from the eurozone and the IMF and avoid a March default on its bond repayments.
"It is clear that there is a lot of pressure being put on the country. A lot of pressure is being placed on the Greek people," Finance Minister Evangelos Venizelos said during a break in talks with EU-IMF debt inspectors late yesterday.
He called on coalition parties to work more closely together.
"No-one is as strong as Hercules on his own to face the Lernaean Hydra (a monster in Greek mythology)," he said. "We must all, together, fight this battle, without petty party motives and slick moves."
A disorderly bankruptcy by Greece would probably lead to its exit from the eurozone, a situation that European officials have insisted is impossible because it would hurt other weak countries like Portugal.
But today, Neelie Kroes, the EU commissioner in charge of the bloc's digital policies, said Greece's exit would not be a disaster.
She told Dutch newspaper De VolkskrantL "It's always said, if you let one nation go, or ask one to leave, the entire structure will collapse. But that is just not true."
Greece has been kept solvent since May 2010 by payments from a 110 billion euros international rescue loan package. When it became clear the money would not be enough, a second bailout was decided last October.
As well as the austerity measures, the bailout also depends on separate talks with banks and other private bondholders to forgive 100 billion euros in Greek debt.
The private investors have been locked in negotiations over swapping their current debt for a cash payment and new bonds worth 50% less than the original face value, with longer repayment terms and a lower interest rate.
Greek government officials say they expect private investors to take losses of up to 70% on the value of their bonds.
However, the EU-IMF bailout has to be secured for the deal with private investors to go ahead as about 30 billion euros from the bailout will be used as the cash payment in the bond swap deal.
Greece's coalition party leaders held a first key meeting on the austerity measures on Sunday, and postponed a second round of talks by a day so Mr Papademos could complete negotiations with EU-IMF debt inspectors that ended early today.
The leaders have already agreed to cut 2012 spending by 1.5% of gross domestic product - about 3.3 billion euros - improve competitiveness by slashing wages and non-wage costs, and re-capitalise banks without nationalising them. But the details remain to be worked out.
Creditors are also demanding spending cuts in defence, health and social security.
European Commission spokesman Amadeu Altafaj Tardio said Greece is already "beyond the deadline" to end the talks.
And German Chancellor Angela Merkel warned that "time is pressing" and "something has to happen quickly".