Greece starts tough talks on eurozone bailout

ATHENS - Agence France-Presse

‘Standing upright in the last 5.5 months has been an agonized effort,’ says Venizilos. AFP photo

Greece started “tough” talks with its global creditors and private bondholders yesterday on details of a new eurozone bailout to enable the country to ease its debt deadlines, the finance minister said.

Finance Minister Evangelos Venizelos said that the negotiations were “”critical” after meeting senior auditors from the eurozone, the European Central Bank and the International Monetary Fund.

“Standing upright as a country in the last 5.5 months has been a constant and agonised effort, a thriller,” said Venizelos, who had earlier also held talks with a bank lobby group which has agreed in principle to take a big cut in debt repayments.

The talks are centred on a eurozone lifeline accorded to debt-ravaged Athens in late October which includes a 50-percent writedown on the country’s short and medium-term debt in agreement with banks.

Greece faced bankruptcy within weeks last month owing to delays to reforms and political uncertainty which had held up application of the latest bailout.

The deadlock was broken only when a temporary unity government under former ECB deputy chief Lucas Papademos took over in November to ratify the bailout.

The EU and IMF auditors will be in Greece for a week, the finance ministry said.

Greek Labour Minister George Koutroumanis said the mission representatives from the eurozone, ECB and IMF, or so-called “troika”, wanted to re-examine the private sector minimum wage to boost competitiveness, the semi-state ANA agency said.

But Koutroumanis, who had earlier briefed Prime Minister Lucas Papademos, said the creditors were “not currently” seeking to abolish holiday bonuses, a measure which the government has resisted for more than a year.

Greek reports said they were also expected to discuss a new tax code to be put to parliament by next month and a private sector pay freeze to cut operating costs.

Cuts to bonus pensions will also be on the agenda, the reports said.

The finance ministry declined to comment.