Greece on the brink

CNN Money
February 6, 2012

Officials in Greece are under pressure to reach an agreement on a new bailout package, as the threat of a default hangs over the country.

Prime Minister Lucas Papademos met with officials from the European Union, International Monetary Fund and European Central Bank Monday to try and hammer out the details of a €130 billion bailout deal.

Greece needs the money to avoid an all-but-certain default on a €14.5 billion bond redemption in March. The concern is that a so-called disorderly default could force Greece out of the euro currency union and shock the global financial system.

Papademos must also convince the leaders of Greece's three main political parties to back a package of fiscal and economic reforms that are a condition of the bailout.

The party leaders agreed over the weekend on the "main elements" of the program, including a plan to reduce public spending by 1.5% of gross domestic output this year, according to Papademos.

But talks scheduled for Monday were pushed back to Tuesday amid apparent disagreements over additional job and salary cuts, as well as pension reforms and tougher tax enforcement.

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