Athens - Greek
party leaders finally gathered on Wednesday to agree a reform deal in
return for a new EU/IMF rescue to avoid a chaotic default, after
repeated delays which have prompted warnings that the euro can live
without Athens.
With the future of Greece and the wider euro zone at stake, Prime Minister Lucas Papademos'
efforts to get the three parties in his government to accept the tough
reforms demanded by the European Union and International Monetary Fund
seem to have been thwarted by arguments over little more than procedural
matters.
One deadline after
another has passed without the leaders making up their minds on terms
for the new 130 billion euro ($172 billion) rescue which Athens must
receive to avoid going bankrupt next month when big debt repayments are
due.
What was supposed to have been
a crunch meeting on Tuesday was postponed because of missing paperwork,
according to one party official, delaying discussion of a deal which
will further inflame an angry Greek electorate.
All
three parties - conservative New Democracy, the PASOK socialists and
far-right LAOS - finally received the 15-page document on Wednesday
morning laying out the principles of the bailout and its conditions, a
party official told Reuters.
There were seen arriving at the prime minister's office at around 1500 GMT.
Attached
to the document are a further 30 or so pages laying out how the
program, which is likely to force a big cut in many Greeks' living
standards, will be implemented.
The
draft of the bailout includes plans to cut the minimum wage by about
20-22 percent, a government official said. It also gives political
leaders the option of cutting pensions over 1,200 euros by up to 20
percent or cutting supplementary pensions by 15 percent on average or a
combination of cuts in both main and supplementary pensions, the
official said.
Delay and more delay
After
officials spoke optimistically that the three leaders - New Democracy's
Antonis Samaras, PASOK's George Papandreou and LAOS leader George
Karatzaferis - would meet just after noon on Wednesday, the meeting was
delayed again.
Earlier, an
official said Karatzaferis wanted all documentation translated from
English - the language of negotiation with the international lenders -
into Greek before he would look at them.
The
far-right leader then threatened to abandon the meeting because he had
not received the Greek version of the document, though he has backed
down from similar threats in the past.
Another
party demanded several hours to study the draft before discussions
could begin, an official at the party said, requesting anonymity.
One Greek news website wrote an open letter to Papademos on Wednesday demanding that he "end this water torture."
"Greeks
cannot any longer stand this torment of constant insecurity that is
destroying the country and hurting our national dignity," it said. "The
prime minister must end this endless bargaining that demeans the country
and its citizens."
Facing
elections possibly as early as April, coalition leaders have shown
little sense of urgency, seemingly deaf to demands from euro zone leaders to make up their minds fast.
An
opinion poll on Wednesday showed that PASOK, which ruled Greece until
Papandreou's government collapsed last November, has most to fear from
elections. The monthly survey by Public Issue for Kathimerini newspaper
showed support for PASOK had collapsed to eight percent from the nearly
44 percent it commanded when it returned to power in 2009.
Karatzaferis
defended the delays. "We can't say a plain yes or no unless we have
assurances from the relevant state authorities that these actions are
constitutional and will lead the country out of the crisis."
"There is time. When it comes to the future of the country, we will find the time," he told reporters late on Tuesday.
Such
attitudes have raised frustration levels in Greece and abroad close to
breaking point. German Chancellor Angela Merkel, whose government funds
much of Greece's bailouts, expressed bewilderment on Monday at what the
delays could achieve.
Dutch Prime Minister Mark Rutte said the euro zone could live without Athens if it did not keep its side of the bargain.
That
drew a robust response from Deputy Finance Minister Filippos Sachinidis
who told parliament that the EU treaty has no clause to force any
country out of the euro.
"There is
no legal ground to throw into question a country's sovereign rights," he
said. "A country that does not protect its social fabric has no
future."
Some exasperated Greeks
believe that their leaders are drawing out the talks to create the
impression that they are driving a hard bargain to soften the deal's
terms.
The reality is that the
"troika" of the European Commission, European Central Bank and IMF holds
most of the cards. While the leaders can seek less harsh cuts in some
areas, overall targets have to be achieved and savings must be made
elsewhere.
Bond exchange
Greek
media reported various elements of the deal were now in place,
including a bond swap deal with private creditors to ease Greece's debt
burden by reducing the value of government bonds held by banks and
insurers. The new bonds would have an average interest rate of around
3.5 percent, said state NET TV.
But
one person familiar with matter said that no deal had been nailed down.
"Everyone knows where we (creditors) stand. There's a lot of clarity on
the terms and conditions but the Greeks still have to provide more
feedback," said the source, noting that little had changed since reports
that the creditors would take a 70 percent loss on their holdings.
One
newspaper also reported that the European Central Bank, which has large
holdings of Greek bonds but has refused to take part in the swap, had
agreed to sell its holdings at their purchase price to a euro zone
bailout fund, the EFSF.
However,
one EU official in Brussels said it was highly unlikely the ECB would
agree to anything without first seeing that the final elements of the
Greek deal were in place.
Financial
markets continued to position for a deal being done eventually. Prices
of German government bonds, which investors buy at times of uncertainty
for their perceived safety, fell on Wednesday. The euro also hit a new
two-month high versus the dollar.
Euro
zone officials say the full package must be agreed with Greece and
approved by the euro zone, European Central Bank and IMF before February
15.