February 5, 2012
Greek Prime Minister Lucas Papademos secured an outline agreement from the three political party leaders supporting his interim government on measures demanded by international creditors to release a 130 billion euro ($171 billion) financial rescue package.
The four men agreed in a five-hour meeting to make additional budget cuts this year equal to 1.5 percent of gross domestic product, according to an e-mailed statement today from the premier’s office in Athens. The four also agreed on a framework for bank recapitalizations, for ensuring the viability of auxiliary pension funds and for measures to reduce wage and non-wage costs to boost competitiveness.
The accord marked a step forward in a series of tense negotiations in Athens this weekend. With the country’s stability at stake, Papademos 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 the prime minister’s coalition members and Greece’s government and its private creditors.
Papademos will meet with the three party leaders again tomorrow to work out the details. Antonis Samaras, the head of the second-biggest party, New Democracy, indicated opposition to some of the measures which the so-called troika of international creditors have proposed.
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