Greek gov't concludes debt deal
Updated: 2012-02-10 01:41
ATHENS - Greek coalition party leaders concluded a deal on austerity measures to secure a new bailout package by European Union (EU) and International Monetary Fund (IMF) creditors on time to stave off a Greek financial meltdown next month, an official statement said on Thursday afternoon.
"Talks amongst the government and troika on the issue that had remained open, were concluded today successfully. Political leaders agreed to the result of these deliberations. Therefore, there is a broad agreement on the content of the new program ahead of tonight's Eurogroup meeting," said a statement issued by the prime minister's office.
On early Thursday, Prime Minister Lucas Papademos and leaders of the two major parties backing the interim administration, head of the socialist PASOK party George Papandreou and conservative New Democracy party chief Antonis Samaras, had clinched an in principle deal on all points of the program, except further cuts on pensions, as foreign inspectors in Athens requested.
The third coalition party leader, George Karatzaferis, of the Popular Orthodox Rally (LAOS), had expressed "severe reservations" on the terms of the deal.
According to local media, the final deal was achieved following telephone conversations between Papademos and party leaders on Thursday, shortly before Finance Minister Evangelos Venizelos' presentation at a Eurogroup meeting in Brussels on the policies.
Greek media, citing government sources, said the leaders had objected to 15-percent cuts on basic and auxiliary pensions, demanded by EU/IMF inspectors, and eventually agreed to cuts in defense spending and other sectors as an alternative solution to save extra 300 million euros (398.64 million US dollars) this year.
Following difficult marathon talks with EU/IMF auditors, the agreement is expected to unlock a critical second aid package to debt-ridden Greece to avert a default on March 20, when a bond repayment comes due, which could have a significant impact on European and global economy.