Greece's government is preparing a document with a list of painful reforms needed to clinch a new financing package, a government official said on Tuesday, moving Athens one step closer to a deal needed to avoid a chaotic debt default.
Officials worked on the draft of a text on the 130-billion-euro bailout plan that will be put to political leaders for approval as strikers protesting against more austerity tussled with police outside parliament.
"The Greek government is working on the final document that will be discussed at the political leaders' meeting later in the day," the official told reporters. Safe haven German government bond futures reversed gains on news of progress in the talks, while the euro also rose against the dollar.
Prime Minister Lucas Papademos negotiated through most of the night with Greece's European Union and IMF lenders, ending at 4 am (0200 GMT) when a 24-hour strike began against the reforms, closing tourist sites and disrupting public transport.
Papademos, a technocrat parachuted in to lead the Greek government late last year, must persuade leaders of the three parties in his coalition government to accept the EU/IMF conditions for the 130-billion-euro ($170-billion) rescue.
"We must find a solution today," said another government official. A third official said one of the main outstanding issues was the level of cuts on top-up, supplementary pensions. Papademos is also due to meet Charles Dallara, who is negotiating on behalf of banks and insurers on a planned bond swap to ease Greece's debt burden.
With Greece's future in the euro zone in question, German Chancellor Angela Merkel said time was of the essence and there are growing signs that euro zone officials have lost patience. They say the full package must be agreed with Greece and approved by the euro zone, European Central Bank and International Monetary Fund before February 15.
This is to allow time for complex legal procedures involved in a bond swap deal - under which the value of private investors' holdings of Greek debt will be cut radically in value - so Athens can get rescue funds before March 20 when it has to meet heavy debt repayments or suffer a chaotic default.
"Don't bow your heads!"
The funds come at the price of deeply unpopular wage and spending cuts that have infuriated ordinary Greeks struggling through the country's fifth year of recession.
Scuffles broke out as protesting strikers tried to climb steps leading to parliament, chanting: "No to mediaeval labour conditions, don't bow your heads, show resistance!" Riot police rushed to block their way as some protesters sprayed red paint on the steps and a wall next to the tomb of the unknown soldier, which commemorates the fallen in past Greek campaigns.
Other protesters burned a German flag and a Nazi flag. Ceremonial guards in traditional Greek kilts, a top Athens tourist attraction, were evacuated and the protesters were pushed back on to the adjacent Syntagma Square, where riot police created a defensive line.
However, the turnout was noticeably smaller than at other protests in recent months, with heavy showers dampening the marchers' spirits. "They were saved by the rain. The weather didn't allow all protesters to take to the streets and show their anger," Ilias Iliopoulos, general secretary of the public sector union ADEDY, told Reuters.
One civil servant watching the protests expressed a weary anger at the austerity imposed already, which has almost halved her monthly pay to 900 euros, and higher taxes. "I wouldn't mind paying for the next two years if I knew austerity would take us somewhere," said 32-year-old Leto Papadopoulou.
"But this crisis seems endless. In 10 years from now, I will be a lost case for the labour market." Early on Tuesday, the strike called by the private and public sector unions GSEE and ADEDY began to bite, bringing the country's main port to a standstill.
Comments
