Greek debt talks continue

Greece has completed the bulk of talks with foreign lenders on a new bailout but has yet to reach agreement on issues such as wages, pensions and the recapitalisation of banks, a spokesman for the Greek government said today.

"There are three or four sticking points left," Pantelis Kapsis told Greek MEGA television. "The bulk of the negotiations has been concluded."

Athens is rushing to wrap up talks with lenders on its second, €130-billion bailout in a bid to unlock funds before big bond redemptions fall due next month. Bankers and officials have said the bailout must be finalised before a debt swap deal with private bondholders can also be announced.

Worried about Athens' commitment to reforms, the "troika" of European Union, European Central Bank and International Monetary Fund lenders have demanded new measures that include lowering the minimum wage level and cutting holiday bonuses.

But those demands have met resistance in Athens, where officials fear further cuts could deepen an already brutal recession and heap new burdens on long-suffering Greeks.

"The discussions are very tough," Mr Kapsis said. "On the one side, there is pressure to restore the economy's competitiveness fast. We are saying that there is clearly an issue of competitiveness. On the other hand, there is also the question of recession which is very important for Greece."

Officials from the troika are due to meet Greek government officials today to try to reach an agreement with lenders on the remaining issues. Prime minister Lucas Papademos will then meet political party leaders later today or tomorrow to secure their backing for the measures, Mr Kapsis said.

Reuters