Prime Minister Lucas Papademos faces his toughest challenge since he assumed his role last November as he prepares to meet -- either Friday or Saturday -- with the leaders of the three parties in the shaky coalition and win their backing for additional austerity measures that are a prerequisite for a second bailout for Greece.
Pressure is growing on the party leaders to agree on the new measures and finalize the broad strokes of an economic program before a scheduled summit of eurozone finance ministers on Monday.
But talks between government officials and members of the European Commission, European Central Bank and International Monetary Fund, known as the troika, continued to stumble on Thursday several thorny issues -- chiefly cuts to private sector wages and auxiliary pensions, as well as the recapitalization of local banks.
According to sources, Papademos is angry at the stance of several ministers and cadres of parties in the coalition that have held up talks.
There are significant concerns in government circles that the party leaders will not sign up to all the troika’s demands, paving the way for a new round of negotiations with foreign envoys and putting crucial rescue funding in jeopardy.
The major issues on the table of talks with party leaders will be proposed cuts to the so-called 13th and 14th annual salaries, cuts to auxiliary pensions, the recapitalization of Greek banks (and whether such a process should grant voting rights to the state) as well as demands by foreign creditors for written commitments by the three leaders.
Conservative New Democracy, which is leading in the polls, and the right-wing Popular Orthodox Rally (LAOS) have both opposed cuts to the 13th and 14th salaries outright, while Socialist PASOK wants the recapitalization of banks to include voting rights.
Apparently, it is not only political dissent that is delaying a deal. According to the Wall Street Journal, a rift between the IMF and Germany is stalling the process. The Washington-based Fund reportedly believes that a deal will also need sacrifices from the European Central Bank and national governments. Germany, meanwhile, objects to official sector involvement, the WSJ reported.