Greece’s efforts to win a second bailout from international creditors teetered in the balance as negotiations in Athens failed to clinch an agreement.
“The distance between success and failure, which could come from misfortune or misunderstanding, is very small,” Greek Finance Minister Evangelos Venizelos told reporters in Athens yesterday after consultations with euro area finance ministers. “We are on razor’s edge.”
Venizelos said while agreement had been found on issues such as bank recapitalization and state asset sales, the government and the so-called troika of international creditors were still at odds over labor reforms and fiscal measures for this year. The talks with euro-area finance ministers were “very difficult,” he said.
With the country’s stability at stake, the government is racing to clinch agreement on a plan that’s been in the works since July, with talks between international monitors and Greek officials running in parallel with discussions among caretaker Prime Minister Lucas Papademos’s coalition members and Greece’s government and its private creditors.
Bond Payment
Open questions involve how much more aid Greece needs, how much more austerity is required, and how to involve the European Central Bank in the debt swap. Facing a 14.5 billion-euro ($19.1 billion) bond payment on March 20 and general elections as soon as April, Papademos must heed calls for tighter austerity to complete the talks on a second aid package in time. Venizelos said everything needed to be completed by tonight.
The discussions have led to tussles among European central bankers and political leaders. The rescue blueprint includes a loss of more than 70 percent for bondholders in a voluntary debt exchange and loans that will probably exceed the 130 billion euros now on the table.
