Greek Prime Minister Lucas Papademos is set to negotiate with leaders of the political parties supporting his caretaker government after he missed another deadline to secure a second aid package.
Papademos will meet with the chiefs in Athens today after delaying the meeting for a second time in as many days while Greek officials and international creditors haggle over the terms. The talks are scheduled for 3 p.m. local time, his office said. He held an unscheduled meeting late last night with the so-called troika, comprising the European Commission, the European Central Bank and the International Monetary Fund, to put the final touches on terms required for a 130 billion-euro ($172 billion) rescue package.
While the prime minister and 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 the rescue. Unions, which struck yesterday, have derided the conditions as “blackmail.”
“There is a path here for Greece, there is a way out for Greece, if it wants to take it, but there’s no denying this will be tough,” Grant Lewis, an economist at Daiwa Capital Europe Ltd. in London, said in a radio interview with Bloomberg’s Ken Prewitt yesterday. “You are talking about multi-year austerity packages against a backdrop of an economy that’s shrinking very rapidly.”