Greece Bailout: Coalition Fails To Agree Cuts

Greek PM Lucas Papademos has failed to secure the support of his coalition for a raft of new austerity measures, after more than seven hours of talks.

Greek PM Lucas Papademos has failed to secure the support of his coalition for a raft of new austerity measures, after more than seven hours of talks.

Disagreement remains on the extent of the austerity measures among coalition partners

He had met officials from three parties to try to secure a deal leading to a fresh bailout package.

The main stumbling block in the crunch talks was proposed pension cuts, reports said.

Mr Papademos was said to be going directly to discuss the problem with EU and IMF officials.

They are representing the so-called "troika" of bailout creditors - the European Union, the European Central Bank and the International Monetary Fund - who had earlier agreed the draft proposals with the prime minister.

They are thought to include a 20% minimum wage reduction, pension cuts and the sacking of 15,000 public sector workers - and have prompted further mass protests.

Officials from Pasok, New Democracy and the far-right Laos party only received the 50-page text on Wednesday morning, reports said, after Mr Papademos agreed the deal with the troika on Tuesday night.


According to Laos leader George Karatzaferis, the bulk of Wednesday's meeting was spent discussing the issue of supplementary pensions, which had reportedly been in line for a 15% cut.

Mr Papademos's office said Mr Karatzaferis had expressed "serious reservations" during the meeting.

As he left, Mr Karatzaferis told reporters: "I made my positions clear from the beginning... I wanted to support Mr Samaras (New Democracy leader) on that issue (pensions)."

Antonis Samaras said he had felt obliged to bargain hard.

"We want to ease the people's suffering,'' he said.

Eurozone finance ministers are to discuss the bailout on Thursday and observers say there is huge pressure for the Greek political leaders to agree a deal prior to that meeting.

But the BBC's Mark Lowen, in Athens, says the package of cuts and reforms would go down very badly with an austerity weary Greek nation.

According to unconfirmed reports in the Greek media, the measures were aimed at trimming 3.2bn euros (£2.7bn; $4.2bn):

  • Minimum wage to be cut by 22% from 751 euros per month to 600 euros.
  • Supplementary pensions to be reduced by 15% but basic pensions also likely to be cut
  • 15,000 public sector jobs to go by end of 2012
  • But holiday bonuses, known as 13th and 14th month salaries, expected to be saved

On Tuesday night, a spokesman for the International Institute of Finance (IIF) which is negotiating on behalf of the private creditors said the talks had been constructive and its three officials were returning to Paris for further consultations.

As part of Greece's new 130bn euro ($170bn; £110bn) bailout deal - Greece's second international bailout - Mr Papademos and Finance Minister Evangelos Venizelos have also been engaged in a separate strand of negotiations with private creditors over a write-off of up to 70% of the value of the money owed by the Greek government.