The leaders of the three national parties in Greece's coalition government will meet Prime Minister Lucas Papademos to discuss the terms of the proposed bail-out plan.
Failure to strike a deal to secure the 130 billion euro ($170 billion) rescue package risks pushing Greece into a chaotic debt default that could threaten its future in the eurozone. Negotiations are on between the leaders and officials from the European Commission (EC), the European Central Bank (ECB) and the International Monetary Fund (IMF), with reports that the troika of EC, ECB and IMF was seeking additional and substantial budget cuts.
Earlier German Chancellor Angela Merkel appealed to the Greek leaders to make up their minds quickly on the EU-IMF deal. “I honestly can't understand how additional days will help. Time is of the essence. A lot is at stake for the entire eurozone,” she said in a news conference with French President Nicolas Sarkozy.
Adding to the pressure on Papademos and the political leaders, ADEDY, which represents workers in the public sector, and GSEE, which represents private sector employees, are holding a 24-hour general strike today, shutting down government services, courts, schools and ferry services. What is taking place isn’t a negotiation, GSEE president Yannis Panagopoulos said in an e-mailed statement. It’s raw, cynical blackmail against a whole people, the statement added. Unions have accused the EU of blackmail and argue that their demands for the axing of 15,000 civil service positions this year and slashing the minimum wage by 20 percent will just lead to more hardship rather than recovery.
The troika argues that lowering wage costs is among reforms necessary to boost competitiveness in the country. Those opposed say the cuts would deepen the country’s recession. The country’s economy shrank 6 percent last year, according to the most recent IMF estimates. In addition, the budget deficit is still close to 10 percent of the GDP and unemployment is about 18 percent.