Greece holds key debt talks amid EU threats

ATHENS / PARIS

A man walks on central Athens square on Feb 3, where a greek flag and words reading ‘Oh, Greece I love you’ are hung from a department store facade. The country is trying to convince the IMF and the EU for further loans in a bid to avoid bankruptcy. AFP photo

Greek Prime Minister Lucas Papademos faced more cliffhanger debt talks yesterday with European Union and International Monetary Fund officials and coalition partners as trade unions called a strike against austerity measures.

With a deadline for crucial debt relief about six weeks away, Papademos was to meet officials from the EU, European Central Bank (ECB) and IMF around midday and then with heads of the Greek socialist, conservative, and far-right parties, the premier’s office said.

Greece is trying to wrap up three weeks of negotiations to avoid a historic default in mid March that could disrupt the 17-nation eurozone and possibly hobble a global economic recovery.

The leaders of France and Germany, meanwhile, told Greece yesterday time was running out in talks on a broad debt restructuring deal and Athens would only get bailout money from Europe if it lived up to its promise to deliver economic reforms in return.

‘Rights and duties’

“We want this accord,” French President Nicolas Sarkozy said. “Greece’s leaders have made commitments and they must respect them scrupulously ... Europe is a place where everyone has their rights and duties. Time is running out, it needs to be concluded, it needs to be signed.”

He and German leader Angela Merkel held a news conference after an annual meeting of top government ministers from both countries where they kept pressure up on Greece to meet reform suggestions.

“We want Greece to stay in the euro. To say it clearly, this is the opinion of both of us,” Reuters quoted Merkel as saying.

“But I also say -- there can be no new Greece program if agreement is not reached with the Troika ... All those who bear responsibility in Greece must know -- we will not deviate from this position.”
Greece’s two main unions have called a 24-hour general strike for today to protest new austerity measures, the Ana news agency said.

The measures “chronicle a pending death” and are aimed at slashing salaries by between 20 and 30 percent on top of previously imposed cuts, Ana reported Iannis Panagopoulos, leader of the GSEE private-sector union, as saying.

After five hours of talks on Feb. 5, Papademos noted agreement on a state savings target of 1.5 percent of gross domestic product (GDP) that would include the implementation of reforms to lower production costs and a scheme to recapitalize Greek banks, Agence France-Presse reported.