ATHENS, Greece – Greece is under heavy pressure from its creditors to implement further austerity and structural measures if it wants to get a second $171 billion bailout, and avoid bankruptcy.
Representatives of Greece’s public creditors – the European Union, the European Central Bank and the International Monetary Fund – have concluded a meeting with Prime Minister Lucas Papademos, who, in turn, will meet the leaders of the three parties backing his 3-month-old coalition government today.
Finance Minister Evangelos Venizelos said Saturday negotiations with its creditors are at “a very crucial stage” and that a very thin line separates eventual success from an impasse.
A measure of the growing impatience of Greece’s eurozone partners with what they see as Greece’s inability to implement changes in the economy was given in an interview by Eurogroup chairman Jean-Claude Juncker to German news magazine Der Spiegel.
The possibility of bankruptcy in March should give the Greeks “muscles where they now still have some symptoms of paralysis,” he was quoted as telling the magazine in an interview released Saturday.
If Greece fails to implement the necessary reforms, then it may not expect “solidarity efforts from the others,” Juncker added.
In Athens, Venizelos told reporters negotiations for the bailout deal Greece must avoid defaulting on its debts must be completed by late today, but that a breakthrough is being held up by demands from debt inspectors for more austerity measures.
Venizelos said debt inspectors want to impose cuts in private sector pay and new austerity measures to keep Greece within its tight deficit-reduction targets.
“We are at the point when we must make decisions and commit to them. Two major issues remain outstanding: labor relations and private sector pay, and fiscal measures required to stay absolutely on target in 2012,” the finance minister said.
Unions and employers have failed to reach agreement on voluntary cuts in wage costs, arguing that a series of emergency taxes imposed by the crisis-hit government over the past two years have seen workers lose 14 percent of their income.
