Greece bailout: Coalition ‘to finalise’ austerity deal

Greek Prime Minister Lucas Papademos is meeting coalition parties in an attempt to seal an austerity agreement to secure a new EU/IMF bailout.

The three parties were handed the draft after final touches were agreed between the PM and EU, ECB and IMF officials.

The accord is likely to include a 20% minimum wage reduction, pension cuts and 15,000 civil service lay-offs.

Public transport came to a standstill on Tuesday as an estimated 20,000 people protested against the cuts.

At one point a German flag was set alight outside parliament.

The party leaders arrived for the meeting at about 17:00 local time (15:00 GMT). It had been postponed for a few hours on Wednesday, having already been put back twice before, because they were yet to see the document.

Mr Papademos held talks late on Tuesday night with representatives from the troika – the European Commission, European Central Bank and International Monetary Fund.

A meeting that had already been delayed on Monday night was postponed again on Tuesday evening as the heads of the three coalition parties said they had not seen the document outlining the austerity deal.

The 50-page text was eventually given to officials from Pasok, New Democracy and the far-right Laos party on Wednesday morning, reports said.

One of the key issues for the coalition was said to be a plan to reduce monthly pensions from 360 euros.

According to unconfirmed reports in the Greek media, the measures were aimed at trimming 3.2bn euros:

  • 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

If the parties give the text their “agreement in principle” it will then be put before the Greek parliament.

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.

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.

Finance ministers from the 17-nation eurozone were due to meet on Thursday but Eurogroup head Jean-Claude Juncker said any decision “depends on the results of the talks in Athens”.


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