(Bloomberg News) European leaders stepped up pressure on Greek politicians to meet the conditions of a 130 billion euro ($171 billion) bailout, saying time was running out.
French President Nicolas Sarkozy met German Chancellor Angela Merkel in Paris today as Greece's interim prime minister, Lucas Papademos, planned to confer with the so-called troika of international lenders in Athens. A gathering of Greek political leaders was delayed by a day until tomorrow as they struggled for a unified response.
"I can't quite understand why we need a few more days--time is running out," Merkel said today in a joint briefing with Sarkozy.
With the country's stability at stake, a tentative consensus yesterday among Greek party leaders on an accord framework marked a step forward as Athens played host to parallel domestic and international negotiations while persuading Greece's private creditors to accept bigger writedowns on their debt holdings.
"An agreement has never been so close, neither for private nor public creditors," Sarkozy said. "We have to conclude it. We can't imagine there won't be an agreement."
The leaders of Europe's two biggest economies proposed setting up an account for Greece's interest payments to guarantee lenders are paid.
'Make or Break'
Euro-area finance chiefs told Greek Finance Minister Evangelos Venizelos in a Feb. 4 conference call that an increase in the bailout package wasn't forthcoming, underscoring their frustration at a lack of progress on fixing the economy. The effort to keep Greece from tumbling into default presents what Deutsche Bank AG Chief Executive Officer Josef Ackermann called a "make or break" moment.
Papademos will meet the three party leaders tomorrow to hammer out the details of the measures. Antonis Samaras, the head of the second-biggest party, New Democracy, indicated he would oppose some measures that the so-called troika of international creditors have put forward.
"They are asking us for greater recession, which the country can't take," Samaras said as he left the meeting with Papademos. "I will fight to avoid that."
Greece's biggest public-sector and private-sector union groups, ADEDY and GSEE, called a 24-hour general strike for tomorrow to protest austerity measures.
Papademos and the party leaders yesterday agreed in a five- hour meeting to make additional reductions this year equal to 1.5 percent of gross domestic product. They have yet to iron out differences over policy measures demanded by lenders on recapitalizing banks, ensuring the viability of pension funds and reducing wages and non-wage costs to boost competitiveness.
The troika of the European Commission, the European Central Bank and the International Monetary Fund wants the country to detail over 4 billion euros of measures to meet targets for 2011 and 2012 because wage cuts will deepen the recession and cause a shortfall this year, one government official told reporters in Athens.