By Stuart Manning
The finance minister of Greece has said that the Eurozone finance ministers were to convene via telephone today, after 12 hours of talks in Athens failed to conduce on a deal to bail out Greece.
Evangelos Venizelos said that a scheduled meeting by eurozone ministers on Greece for Monday would now be held on Wednesday. In a statement, Venizelos said, "I will participate in a Eurogroup telephone conference at 1230 GMT" to discuss details of a rescue deal for Greece worth 130 billion euros ($171 billion), which officials have been trying to settle since October.
He said, "Critical issues pertaining to the country's future remained open" after 12 hours of "tough" negotiations with the European Union, International Monetary Fund and European Central Bank on Friday. The three agencies, which are locally known as the 'trioka,' which had bailed out Greece in 2010 with an earlier loan, are asking Greece to make further labor cost cuts, which Greek unions are refusing on fears that it could widen the already broad recession.
The political coalition that backs the interim government of Greece strongly opposes to the troika's demands to deepen civil servant cuts and to cuts in the minimum wage. The Greek Prime Minister Lucas Papademos has reportedly threatened that he's resign if his coalition supporters reject the demanded measures.
The government spokesperson Pantelis Kapsis declined to comment on the reports, as he told Real FM Radio, "I do not want to make such assumptions. I think the political leaders and the prime minister will jointly take the decisions on how we will proceed from now on."
This weeks, reps of private holders of Greek debt will return to Athens for more negotiations as Greece strives to avoid sovereign default. A spokesperson for the Institute of International Finance, the global banking organization leading the debt write-down talks, has said that IIF chief Charles Dallara and Jean Lemierre, adviser to French bank BNP Paribas, were to arrive in Greece for further talks.
For months, Greece has been negotiating to receive debt relief under the Private Sector Initiative as a condition to receive a second international bailout from the EU and the IMF, which was agreed up on in October. Governments and banks of the Eurozone have both been negotiating hard for weeks in their efforts to reduce by at least half the 200 billion euros in privately held Greek debt. The current overall debt of the country is 350 billion euros.
In a statement on Friday, Papademos said that Greece had almost finished negotiating the Eurozone bailout which depends on the debt write-down. He said, "We are in the final phase of a very critical procedure to form Greece's new economic program and complete a loan deal that will lighten the load of the public debt and ensure the country's financing for many years to come."
Athens is under much pressure to form a deal with private creditors. This week, the finance minister said that an official offer to creditors must be made by February 15. Greece faces debt repayments of 14.4 billion euros on March 20, 2012.
