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Strain shows in Greek coalition ahead of debt talks
February 06, 2012

Lucas Papademos (2ndR) poses with George Karantzaferis (L), Antonis Samaras (2ndL) and George Papandreou Lucas Papademos (2ndR) poses with George Karantzaferis (L), Antonis Samaras (2ndL) and George Papandreou
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Leaders of Greece's ruling coalition were steeling themselves for fresh talks Monday after objections to another round of spending cuts stalled progress on clinching a critical debt rescue package.

Despite the looming threat of a disastrous debt default in March, Prime Minister Prime Minister Lucas Papademos could not persuade his socialist, conservative and far-right allies to swallow the bitter pill.

Sunday's talks broke up after five hours of negotiations.

Papademos said the leaders had agreed on the need to cut public spending by 1.5 percent of GDP, with measures including wage cuts, pension adjustments and bank recapitalization.

But after the meeting, at least two of the coalition party leaders, George Karatzaferis, leader of far-right party LAOS and Antonis Samaras, head of the conservative New Democracy party, made it clear they could only go so far.

Both attacked fresh demands from international creditors they said would heap fresh pain on the Greek people.

"I will not contribute to the explosion of a revolution from destitution that will burn all of Europe," Karatzaferis told reporters as he left the meeting.

Samaras said the country was "being asked for more austerity, which it is unable to bear. I am fighting to prevent this."

They face pressure from the 'troika' of international creditors -- the European Union, the International Monetary Fund and the European Central Bank -- to make further cuts.

Those cuts reportedly included a 20-percent cut in the 750 euros ($985) monthly minimum wage; a 15-percent cut in supplementary pensions; and 15,000 civil service redundancies this year.

At stake is a new eurozone rescue loan deal worth 130 billion euros ($171 billion), pending since October.

But the ruling coalition has also struggled to agree terms with private lenders to wipe off part of the 350-billion-euro Greek debt.

And time is runnng out, as Athens faces loan repayments of 14.4 billion euros ($19 billion) on March 20.

On Saturday, Finance Minister Evangelos Venizelos had insisted it all had to be settled by Sunday night to keep the country on schedule to make its debt repayment schedule safely.

Papademos meanwhile, has reportedly set his own red line, threatening to resign if his coalition fails to back him.

AFP