Greek leaders working for agreement on cuts

Greek political leaders continued Wednesday working to secure agreement on new austerity measures to be presented to the Country's financial backers.

Driving the talks has been the recognition that the worsening collapse of the Greek economy will require another increase in bailout funds, money that will not be forthcoming until the rest of Europe is persuaded that Greece is serious about taking such steps as firing more public-sector workers and cutting private-sector wages.

Prime Minister Lucas Papademos was to meet leaders of the 3 parties supporting his interim government later Wednesday to go over a draft agreement reached with the country's International creditors.

One option that is still being actively discussed would be for the European Central Bank to exchange its portfolio of more than 50-B Euros, or US$66-B, in Greek bonds for securities issued by Europe's main rescue fund.

The swap would be priced not at the bond's face value but at the reduced price at which the central bank bought the securities, thus allowing Greece to benefit from the discount.

These discussions have been ongoing for the better part of a month now and people involved in them say that the swap is not yet a done deal.

For it to take place, they say, Greece would need to reach an agreement with its private sector creditors on a restructuring and to convince its European partners and the International Monetary Fund that it is ready to push through another set of tough economic reforms.

Amadeu Altafaj Tardio, a spokesman for the European Commission in Brussels, declined to comment on the ECB position. The EuroGroup of finance ministers is expected to convene a meeting after a final agreement is reached in Athens.

Paul A. Ebeling, Jnr. Paul A. Ebeling, Jnr

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.