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Second bailout talks resume today as Greece tries to avoid bankruptcy

The leaders of the three coalition parties meet with the PM to agree on austerity measures so a €130bn bailout can be secured – and a default avoided.

Image: Kostas Tsironis/AP/Press Association Images

TALKS BETWEEN GREECE’s coalition parties will resume today as they rush to agree a deal to avoid bankruptcy and a default as early as next month.

The three leaders – George Papandreou, Giorgos Karatzaferis and Antonis Samaras – met with Prime Minister Lucas Papademos yesterday to finalise austerity measures being demanded by some of the country’s creditors.

The measures expected include more private sector pay cuts, as well as job losses in the civil service.

Some deal on the debt crisis must be implemented before a further €130 billion is secured from the Troika. The second bailout deal is needed so Athens can avoid a default by the end of next month. A €14.5 billion bond payment is due on 20 March.

Bloomberg reports that the four men agreed to make additional reductions this year equal to 1.5 per cent of GDP. A framework for bank recapitalisations (without nationalisation) and wage cuts to support competitiveness were also agreed.

However, no deal on minimum wage or holiday bonuses was reached. The finer details of the agreed measures were also proved elusive.

Samaras, the leader of the New Democracy party, has said he will oppose some of the measures to be discussed today as they will push citizens further into recession.

Far-right Laos party also said it would not “contribute to a revolution that will humiliate” Athens further, reports BBC News.

Papandreou wishes the State to temporarily take over Greek banks.

The Troika wants agreement from all three party leaders on the belt-tightening as it needs assurances from anyone who could win upcoming elections in April.

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Unless further reforms are implemented, eurozone leaders may block plans for a restructure of privately-held debt, which would half the value of the country’s debt,  reducing it to 120 per cent of GDP by 2020.

Meanwhile, Angela Merkel and Nicolas Sarkozy are to meet in Paris later today for a Franco-German cabinet session.

-Additional reporting by AP

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