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ATHENS, Greece (AP) — Representatives of Greece’s creditors met again Sunday with Prime Minister Lucas Papademos to press their demands for tougher austerity measures and private sector pay cuts.At stake is a new euro130 billion ($171 billion) bailout deal without which Greece will default before the end of March.
Following talks with the representatives of the so-called ‘troika’ — the European Commission, the European Central Bank and the International Monetary Fund — Papademos will meet with leaders of the three parties backing his coalition government. All have expressed reservations about the troika’s proposals for wage cuts.
Papademos had floated the idea of the party leaders joining him in the talks with the troika representatives to argue the case for a different set of measures with equivalent fiscal results. Giorgos Karatzaferis, leader of the populist right Popular Orthodox Rally party has refused.
“I will go (to the Prime Minister’s office) when the guests have gone,” Karatzaferis said.
It is not yet known whether socialist leader George Papandreou — whom Papademos replaced as Prime Minister in November — and conservative leader Antonis Samaras will agree to meet the EU-IMF representatives.
Unions and employers’ associations in Greece strongly oppose cuts in private sector wages, warning it would deepen a recession, already in its fourth year, with unemployment topping 19 per cent.
Politicians also balk at proposals that are certain to deepen public anger over loss of income.
“The (debt inspectors) want to make Greece more competitive and they have a certain view on how that should be done. We do not have the same view,” a senior government official said after an earlier round of talks between Papademos and the troika that went past midnight on Saturday. He asked not to be named because talks are ongoing.
Finance Minister Evangelos Venizelos described the talks Saturday as being “at the razor’s edge.”
“There is a very small margin separating a successful end in (negotiations) from an impasse that could be due to a misunderstanding,” he said.
The government must also meet with representatives of banks to clinch a bond swap deal that will reduce Greece’s debt by euro100 billion ($131.6 billion). Besides the main negotiators, Charles Dallara, managing director of Washington-based Institute of International Finance (IIF), and Jean Lemierre, senior adviser to the chairman of French bank BNP Paribas, Deutsche Bank CEO Josef Ackermann, who is also the IIF board chairman, is in Athens to take part in the talks.