Greece lets another bailout deadline slip by

Greece let yet another deadline slip on Monday for responding to painful terms for a new EU/IMF bailout as patience in Brussels wore thin over drawn-out negotiations among its feuding political leaders. Failure to strike a deal to secure the 130 billion euro (107 billion pounds) rescue risks pushing Athens into a chaotic debt default which could threaten its future in the eurozone. Panos Beglitis, spokesman of the PASOK socialist party, said on Sunday that leaders of the three parties backing technocrat Prime Minister Lucas Papademos' government had to give their responses in principle by 12 pm. However, a government official denied that the parties had been given an ultimatum to respond on Monday.

Asked whether the parties had to respond in time for a Euro Working Group meeting of finance ministry officials in Brussels, the Greek official said: «No, there is no deadline." He said the entire Greek side had to agree terms of the rescue, which would be the second for Athens since 2010, with international lenders before the next meeting of the Eurogroup of eurozone finance ministers.

"The only deadline is to have a staff agreement for the second bailout and the agreement of the political leaders before Eurogroup,» said the official, who requested anonymity. No date has yet been set for the Eurogroup meeting, although it is expected this week. In Brussels, frustrated EU officials said Greece was already in «overtime» after failing to clinch an agreement at the weekend on a package including wage and pension reductions, job cuts and tougher tax enforcement measures.

"It will be very bad if there is no white smoke from Athens today,» said one eurozone government source. "We have already missed deadlines.

In order to prepare the fresh tranche of money and reschedule debt in the first half of March, a whole series of technical steps must be taken.

We need a decision now to put the mechanism of rescheduling in place." Beglitis said the deadline had merely slipped to Tuesday due to the changing timetable of eurozone meetings. Leaders of PASOK, the conservative New Democracy and the far-right LAOS party - who may face an angry electorate in parliamentary polls as soon as April - still have to agree on unresolved problems.

These include labour market reform and shoring up domestic banks. Greece needs the bailout money by March to meet big debt repayments but tempers are rising in the European Union over what it sees as Greek dithering on implementing reforms.


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