Greek government struggles to avoid bankruptcy

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REPORTING FROM ATHENS -- With the country teetering on the brink of bankruptcy, Greek Prime Minister Lucas Papademos prepared Monday to resume talks with the party leaders backing his coalition government, hoping to win support for added austerity measures despite swelling social unrest and calls for new nationwide walkouts.

Greece’s international creditors have demanded the measures, including wage cuts of up to 20% and added pension reductions, in exchange for a second $170-billion bailout, which the government desperately needs to avoid a devastating default.


Although the party leaders and Papademos agreed on ‘some basic issues,’ according to a government announcement issued after a first meeting on Sunday, a dangerous deadlock emerged over what a new round of budget cuts, estimated at about $4 billion, would actually entail.

Eurozone ministers had hoped to meet on Monday to finalize details of the mammoth bailout, the second patched together by the European Union and the International Monetary Fund in two years.

Still, Greece’s creditors and its European peers seem to be losing patience.

Over the weekend, more than 50% of Germans taking part in a survey said it would be best to part ways with their weakest euro partners and for Greece to exit the single-currency family.

In Athens, labor unions struck back at the prospect of more brutal budget cuts being unveiled, calling for a 24-hour nationwide strike. Pundits and politicians also heightened criticism and debate over Europe’s prescription of austerity as a cure for Greece’s debt woes.

‘They are not leaving us any options,’ said Nikos Cotzias, a professor of economics at Athens University. ‘It’s like they’re telling us to choose between jumping off the balcony or having your house torched. What would you choose?’


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-- Anthee Carassava