CHAOTIC EFFORTS to avert a Greek debt default slid further into disarray as technocrat Greek prime minister Lucas Papademos postponed crucial talks with his government for a second day.
After several delays, Mr Papademos had been due to meet the chiefs of the three parties in his coalition late last night. Originally scheduled for Monday, these talks were scrapped at the last minute and are now expected to take place today.
The confused situation in Athens has raised further questions over Mr Papademos’s power to ensure his administration backs the harsh new austerity measures sought by the EU-ECB-IMF “troika” in return for a €130 billion bailout deal.
The growing sense of uncertainty over the government’s response to an ultimatum from the troika has intensified worries that the country might default on its debts next month.
Greece is under mounting international pressure to accept the rescue package, but the country’s leaders have baulked at wage and pension cuts sought by the troika as they face a general election in April.
Europe will not release the loans to Athens without firm government support for the new plan and Greek authorities do not have enough money to repay a €14.5 billion debt due next month.
“I think all Europe has now its eyes on Athens. We are in a very decisive moment regarding the future of Greece and the future of the euro,” said European Commission president José Manuel Barroso before the cancellation of last night’s talks.
“We want Greece in the euro . . . For that, we are urging the political parties in Greece to make a commitment to the common goals.”
Dutch finance minister Jan Kees de Jager said a “chaotic situation in Greece could hurt all of us and that is why we are doing all we can to keep Greece in the euro zone”. However, he added that it was “essential the Greek leaders act now and implement all necessary measures”.
The long-awaited meeting between the chiefs of the three parties in the Greek coalition had been due to begin at 9pm after several postponements since Monday.
Officials said Mr Papademos would seek the green light from the party leaders for a draft agreement that he and Greek finance minister Evangelos Venizelos had finalised at an earlier meeting with troika officials.
Greek media had reported that the three leaders – George Papandreou of socialist Pasok, Antonis Samaras of conservative New Democracy and Yiorgos Karatzaferis of the right-wing Popular Orthodox Rally – would be asked to approve or reject the draft agreement.
Speaking after the troika talks, which continued into the early hours of Tuesday morning, Mr Venizelos said “huge pressure” was being exerted on Greece and its people and he likened negotiating with the troika to battling a multiheaded beast. “It’s like the Lernaean Hydra; we are constantly closing fronts and to find new fronts opening up,” he said.
Mr Papademos also held last-minute talks with representatives of the Institute of International Finance banking lobby to fine-tune separate arrangements to cut Greece’s privately held debt by €100 billion.
The government talks came at the end of a nationwide general strike that brought thousands of angry and frustrated Greeks on to the streets of the capital and other major cities.
Estimates put the number attending demonstrations in Athens at about 20,000, a relatively low turnout blamed by organisers on wet weather.
During a brief flare-up of violence, hundreds of protesters chanting “Nazis out!” tried to storm up steps leading to the parliament building.
Police used pepper spray against the protesters, who burned a German flag.
Plans to cut the minimum wage by more than 20 per cent to €500 a month as well as cuts to supplementary pensions have enraged trade unionists.
“This is a crime against the nation,” said Vangelis Moutafis of the private-sector union GSEE.
“They are driving wage earners into absolute poverty. They are wiping out the unemployed and retired people . . . They are selling off the state for nothing. This must not continue. It’s a crime and it must be stopped.”