Besprekingen Griekenland duren langer dan verwacht (en)
BRUSSELS - Greek talks with international lenders on a €130bn bail-out have gone into further overtime as the technocrat premier struggles to secure the backing of political parties for more spending cuts.
The government had sought to wrap up the deal over the weekend, but after marathon talks, Prime Minister Lucas Papademos i was able to announce only a partial deal in support of the austerity measures demanded by international lenders.
In a statement Sunday night, Papademos said the party chiefs had agreed to reduce public spending by 1.5 percent of the country's gross domestic product, cut wages and labour costs and recapitalise their cash-strapped banks.
According to official figures, some €65bn has been pulled out of Greek banks since 2009, out of which around €16bn was sent abroad, mainly to British and Swiss accounts.
"The prime minister and political leaders will meet again tomorrow to complete the consultations on the content of the programme," the statement read.
Wage cuts and a pensions freeze are said to be the most contentious points, as no party wants to be associated with such measures ahead of the April elections.
Antonis Samaras, leader of the conservative New Democracy party, said the country was "being asked for more austerity, which it is unable to bear."
In return, Papademos is said to have threatened to resign if there is no agreement, Greek daily Kathimerini reported.
The country is now in its fifth year of recession. The unemployment rate is at 20 percent and the number of homeless people on the freezing streets of Athens has increased by 25 percent since 2009. The International Monetary Fund, itself one of Greece's lenders, has admitted that the social costs are too high.
In protest at the planned cuts, the country's biggest trade unions have called for a 24-hour strike on Tuesday.
A spokesman for the Socialist Pasok party said political leaders were given a noon-deadline on Monday to agree on the cuts, so that the government could present the deal to a teleconference or snap meeting of eurozone finance officials. But as one EU official put it, "with Greece, no deadline is for sure."
The ultimate deadline for Greece is 20 March, when it has to repay €14.5bn worth of bonds for which it desperately needs the second bail-out. But a preparatory phase of four to six weeks is needed prior to that in order for the finance ministry and banks to implement the so-called private sector involvement - bond-holders taking 'voluntary' losses of more than 50 percent, which should also be part of the €130bn bail-out deal.
In an interview with Der Spiegel, eurozone chief Jean-Claude Juncker i did not rule out that Greece may be declared bankrupt if the deal is not sealed in time.
"If we were to establish that everything has gone wrong in Greece, there would be no new programme, and that would mean that in March they have to declare bankruptcy," he said.
Juncker mentioned a promised privatisation drive and the struggle against rampant corruption in state administration as two areas that needed particular attention.
Top banker Josef Ackermann, head of both Germany's financial giant Deutsche Bank and the International Institute of Finance negotiating with the Greek government, on Saturday warned that if Greece were to go bust, the entire financial system would be shaken.
Speaking at the Security Conference in Munich, the Swiss banker said: "It's not only about Greece, it's about Europe," adding that other troubled euro-countries would be immediately affected. Portugal, already under a bail-out programme, is seen as the next country in line in case of a Greek default.
Meanwhile, German Chancellor Angela Merkel i and French President Nicolas Sarkozy i are set to hold talks and a joint government meeting in Paris on Monday.
Germany's fierce opposition to the European Central Bank or national governments taking losses on their Greek bonds along with the private sector is another reason why the negotiations in Athens have stalled for weeks.