Press Association
Thursday 24th May 2012
"Crucial" issues remain to be resolved in Greece's critical negotiations over a second multi-billion euro international bailout as talks continue.
A long-anticipated bond swap deal was now the easier part of the process in securing continued funding for the country, finance minister Evangelos Venizelos said after marathon talks with debt inspectors from the European Commission, the European Central Bank and the International Monetary Fund, known as the troika.
Mr Venizelos said he would speak by teleconference with the other eurozone finance ministers on Saturday and that the ministers would meet on Wednesday - a gathering that had originally been expected to be held on Monday.
"After 12 hours of continuous and tough negotiations with the troika on the new programme, we have solved quite a few issues. But there remain crucial issues which concern the future of the country and the Greek people," he said.
Greece desperately needs to secure the second bailout and the bond swap deal that seeks to halve its debt load in order to avoid a catastrophic default within weeks. A major sticking point in the negotiations over Greece's second 130 billion-euro (£108 billion) bailout are disagreements over the troika's demands for private sector wage cuts.
Apart from the new bailout talks, Greece is conducting urgent negotiations with its private creditors, who are being asked to lose half the face value of their Greek government bonds. New talks on the writedown - which would slash Greece's national debt by 100 billion euro - will be held in Athens over the weekend.
Mr Venizelos said the negotiations on the bond swap "is now the easier part of the whole procedure".
In a letter to the government on Sunday, Greek unions and employers said they rejected proposals to slash the minimum wage and further cut annual salaries. Private sector workers have already suffered a 14% loss in income due to emergency taxes imposed since the beginning of 2010, the letter said.
The creditors argue that cutting labour costs is essential to making the Greek economy more competitive. The unions and employers' associations argue that the move will only further depress consumer spending and therefore tax revenue.
The government must conclude negotiations on its second rescue package "that will ensure debt sustainability of the country in the long run, and that will bring remedies to a number of serious problems that the Greek economy has had even before this crisis," said Amadeu Altafaj Tardio, spokesman for EU monetary affairs commissioner Olli Rehn.
