Prime Minister Lucas Papademos, back in Athens after two days of tough talks in Brussels and Frankfurt on two debt deals Greece is negotiating with foreign creditors, is expected to hold another meeting with the leaders of his coalition government on Wednesday or Thursday in a bid to clinch their support for tough new austerity measures. Papademos is expected to present the party leaders with the positions of his EU peers, set out to him at Monday’s summit in Brussels, and to explain which Greek objections they are prepared to accept and to what extent. Unresolved issues include possible wage cuts, cuts to auxiliary pensions and the recapitalization of banks. However it appears that foreign creditors are ready to show some flexibility on the thorny issue of wages.
In comments made during an interview to Kathimerini by Poul Thomsen, the head of the Greek delegation of the International Monetary Fund -- one of the country’s three foreign creditors -- indicated that the 13th and 14th salaries in the private sector need not be cut if authorities lower the minimum wage and move ahead with closing down state-backed entities. Papademos is due to meet Thomsen and envoys from the European Commission and European Central Bank on Friday following talks with the party leaders. Government spokesman, Pantelis Kapsis, said that Papademos would convene a session of the party leaders before any final decisions are taken on the new economic program but he did not specify when this meeting would take place.
If a deal between the government and the creditors is reached, it will be presented at a summit of eurozone finance ministers in Brussels next Monday, paving the way for the approval of a second bailout for Greece and a bond swap aimed at reducing the country’s debt burden by 100 billion euros. Once a deal is secured, Papademos will face the next challenge – voting the new measures through Parliament. It will be no mean task convincing MPs who are gearing up for elections as early as April to impose more hardship on their voters. But, in comments made in Brussels early on Tuesday, the premier said he was confident that lawmakers would do the right thing at such a critical time when the country’s solvency and future in the eurozone are at stake.