Papademos claims reforms consensus

Prime Minister Lucas Papademos said Sunday that he obtained backing for reforms from the leaders of the three parties in his coalition government ahead of Monday’s European Union summit, but doubts remain about whether there will be enough support for the private sector wage cuts Greece’s lenders are demanding. Papademos met Sunday for 2.5 hours with PASOK’s George Papandreou, New Democracy’s Antonis Samaras and the head of the Popular Orthodox Rally (LAOS) Giorgos Karatzaferis. Papademos said there had was “absolute convergence” between him and the party leaders on the structural reforms and austerity measures Greece needs to adopt to move closer to agreeing a new bailout. “We are fighting hard together to secure the country’s position in Europe and the euro, and the community of developed countries,” said Papademos.

“United, we can succeed.” Papademos wanted a show of support ahead of his meeting with his EU counterparts in Brussels. However, sources said that all three party leaders raised objections during Sunday’s meeting to one of the controversial measures that Greece’s lenders, also known as the troika, have proposed. Papandreou, Samaras and Karatzaferis are all said to have urged the premier to reject the proposal for cuts to the minimum wage and private sector salaries. Samaras reportedly produced a chart showing that such a move would deepen Greece’s recession by 3.5 percent of gross domestic product.

The three party leaders also expressed concern about an apparent German proposal for tighter European control over Greece’s budget. Papademos will have more convincing to do in Brussels as there appears to be serious skepticism about Greece and its ability to meet the targets the troika is setting. In an interview with the Dow Jones newswire Sunday, German Finance Minister Wolfgang Schauble said that Greece might not qualify for a new bailout unless it can overhaul its economy and public sector.

The Greek prime minister will also brief EU leaders on talks with the country’s bondholders over a large restructuring program, known as PSI. The talks with the Institute of International Finance are due to conclude this week after the two sides said progress had been made on Friday.


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