February 7, 2012
Greek Prime Minister Lucas Papademos plans to convene the nation’s political leaders to seek consensus on the cuts required for a bailout as unions called a strike to protest and European leaders pressed for answers.
While Papademos and the party chiefs have agreed to make further cuts this year equal to 1.5 percent of gross domestic product, they have yet to close gaps over measures demanded by creditors for a 130 billion-euro ($171 billion) rescue. German Chancellor Angela Merkel said “time is running out,” while unions derided the conditions as “blackmail.”
“It is clear we are going into another drama for Greece with many questions unanswered,” Patrick Legland, head of research at Societe Generale SA, told Bloomberg Television today. “It’s kind of a catch-22 where they have to reduce their deficit but there is no growth. It’s very tricky.”
At stake is whether Greece wins the bailout, secures a debt writeoff with private creditors and remains in the euro region. Finance Minister Evangelos Venizelos told reporters late yesterday that “failure of these talks, failure of the plan, the country’s bankruptcy, means even greater sacrifice.”
The euro fell 0.1 percent to $1.3123 as of 1:05 p.m. in Athens as investors await the outcome of the Greek talks. The Stoxx Europe 600 Index slipped 0.5 percent and the Euro Stoxx 50 also dropped 0.5 percent.
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