Greek bailout: Coalition partners can't agree on austerity program

Rick Moran
It appears that no one in Greek politics wants to take responsibility for the massive pain that will be inflicted on Greek citizens as a result of the austerity program negotiated between Prime Minister Papademos and the EU. Successful adoption of the austerity program means that Greece will receive $170 billion in bail out funds.

BBC:

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.

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

The main stumbling block was proposed pension cuts, reports said.

Immediately after the talks ended, Mr Papademos held a meeting with officials from the "troika" of bailout creditors which broke up after several hours.

A statement issued by the prime minister's office said the aim of the meeting with the troika - representatives from the European Union, the European Central Bank and the International Monetary Fund - was to "conclude the agreement" before Thursday's meeting of eurozone finance ministers.

Greek Finance Minister Evangelos Venizelos is travelling to Brussels to explain the sticking points of the deal to the Eurogroup.

"I leave for Brussels with hope that the Eurogroup will take a positive decision concerning the new aid plan," Mr Venizelos said prior to his departure from Athens.

This is not likely as long as Papademos is unable to secure the backing of his coalition partners. A potential deal is in the works that would see about half the pension cut go forward while the government would have two weeks to find additional savings to meet the requirements set down by the EU.

Those are: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

Even if the coalition agrees to some kind of cuts that meet the target, there is still the stuck negotiations for Greek bond holders who are balking at the terms of the haircut they are being forced to take.

Default is becoming more real by the day.



It appears that no one in Greek politics wants to take responsibility for the massive pain that will be inflicted on Greek citizens as a result of the austerity program negotiated between Prime Minister Papademos and the EU. Successful adoption of the austerity program means that Greece will receive $170 billion in bail out funds.

BBC:

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.

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

The main stumbling block was proposed pension cuts, reports said.

Immediately after the talks ended, Mr Papademos held a meeting with officials from the "troika" of bailout creditors which broke up after several hours.

A statement issued by the prime minister's office said the aim of the meeting with the troika - representatives from the European Union, the European Central Bank and the International Monetary Fund - was to "conclude the agreement" before Thursday's meeting of eurozone finance ministers.

Greek Finance Minister Evangelos Venizelos is travelling to Brussels to explain the sticking points of the deal to the Eurogroup.

"I leave for Brussels with hope that the Eurogroup will take a positive decision concerning the new aid plan," Mr Venizelos said prior to his departure from Athens.

This is not likely as long as Papademos is unable to secure the backing of his coalition partners. A potential deal is in the works that would see about half the pension cut go forward while the government would have two weeks to find additional savings to meet the requirements set down by the EU.

Those are: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

Even if the coalition agrees to some kind of cuts that meet the target, there is still the stuck negotiations for Greek bond holders who are balking at the terms of the haircut they are being forced to take.

Default is becoming more real by the day.