Prime Minister Lucas Papademos called representatives of the European Commission, European Central Bank and International Monetary Fund – known as the troika – back to his office at the Maximos Mansion at about 1 a.m. in an attempt to resolve the dispute after roughly eight hours of talks with the party leaders.
Reports said that the two sides would have to find a way to make 300 million euros of savings in order to avoid 15 percent cuts to supplementary pensions and another 15 percent to basic pensions for former employees at public enterprises.
New Democracy made it known through its leader Antonis Samaras that it wanted supplementary pensions to drop no lower 300 euros per month.
PASOK leader George Papandreou said that his party would not allow the difference in the savings the troika was looking for to be made up by cuts to basic pensions.
Papademos’s office issued a statement saying that the party leaders agreed on all the other measures and that the stumbling block would be removed before the Eurogroup meeting on Thursday, which was to be attended by Finance Minister Evangelos Venizelos.
“The Prime Minister and the political leaders met and examined in depth the content of the new economic program accompanying the country’s economic support for the following years,” the statement said.
“There was broad agreement on all the program issues with the exception of one, which requires further elaboration and discussion with the troika. This discussion will take place immediately, so as to conclude the agreement in view of the Eurogroup meeting.
“The president of LAOS Giorgos Karatzaferis expressed serious reservations.”
Samaras explained why he was standing firm on the issue of pension cuts.
“At these difficult times, we have to look after regular people, such as pensioners,” said Samaras. “I have no right not to negotiate hard and I am not concerned at all if some people try to misinterpret this.
“We are trying to ensure that people feel less pain.”
Papandreou did not make any comments after leaving the meeting.
Papademos is set to meet again with the leaders or contact them on the telephone after concluding his talks with the troika.
Karatzaferis was the first to leave the meeting and made it clear that he was not signing the agreement but would continue to be part of the coalition government. He complained that he did not have enough time to study the text.
The 50-page document details the austerity measures and reforms Greece will have to agree to secure a crucial 130-billion-euro bailout. It foresees savings of some 3 billion euros this year and another 10 billion until 2015.
Many changes are also foreseen for the private sector. The monthly minimum wage, which is currently at 751 euros, is to be reduced by 22 percent. It will be cut by an additional 10 percent for those aged under 25 in a bid to tackle youth unemployment, which stands at around 40 percent.
The duration of collective labor contracts is to be restricted to three years. Thereafter, the terms of the contracts will apply for just three months, after which employers will be free to negotiate wages with workers.
There will be no automatic pay rises until unemployment -- now at 19 percent -- falls below 10 percent.
The document also foresees an end to permanent jobs for employees in public enterprises and state-controlled banks.
Other measures are a 2 percent cut in social security contributions paid by employers and a 3 percent reduction in contributions to the Social Security Foundation (IKA).