Greece bailout: Coalition 'to finalise' austerity deal

Greek party leaders, from left,  George Karatzaferis, Antonis Samaras, Prime Minister Lucas Papademos and George Papandreou at the prime minister's office in Athens (8 Feb 2012) The talks had been postponed to give opposition leaders time to digest the proposals

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, and has prompted further mass protest.

Eurozone finance ministers are to discuss the bailout on Thursday.

Analysts believe this news indicates the Greek politicians have reached an agreement, with Eurogroup head Jean-Claude Juncker previously having said the Brussels meeting would "depend on the results of the talks in Athens".

The party leaders had arrived at Mr Papademos' office 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.

Greek deadlines

  • This week: Eurozone finance ministers to hold a meeting or conference call to approve the latest bailout, as soon as Greek politicians agree to conditions
  • 15 February: The latest a deal can be finalised in order to allow enough time for the Greek debt exchange, according to the Commission
  • 20 March: Greece must have received its next tranche of bailout cash to meet a 14bn euro debt payment
  • April: Greek elections expected

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.

The BBC's Mark Lowen, in Athens, said a deal was expected to be announced later but that the package of cuts and reforms would go down very badly with an austerity weary Greek nation.

A protester in front of the Greek parliament (7 Feb 2012) An estimated 20,000 people protested in Athens on Tuesday against the austerity measures

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.

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.

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