Greek party leaders to decide on long-delayed debt deal

Feb 7, 2012, 17:41 GMT

Athens - The leaders of Greece's governing coalition were to attempt to reach a long-delayed agreement on painful cutbacks demanded by international creditors late Tuesday while tens of thousands took to the streets in protest.

Party leaders will meet with Prime Minister Lucas Papademos to finalize a range of measures, demanded by the European Commission, the International Monetary Fund (IMF) and the European Central Bank, known as the troika, in exchange for more rescue loans crucial to avoiding a default.

Officials at the prime minister's office said party leaders were given a copy of the 15-page draft agreement of the austerity deal before the meeting, which is expected to start roughly around 9 pm (1900 GMT) and will last for several hours.

Reports said the agreement, which includes new income and job cuts, could be voted on in the country's 300-seat parliament as soon as Sunday.

The cutbacks have sparked wide-spread anger. Greek riot police clashed with anti-austerity protesters who tried to break a cordon outside parliament earlier on Tuesday, while more than 10,000 demonstrators from Greece's two biggest labour unions marched nearby.

No injuries or arrests were reported.

Labour unions are holding a 24-hour strike in protest at the planned cuts which they say at unfair. Ferry and train services were halted, forcing the closure of schools and banks. Hospitals were operating with just emergency staff as doctors walked off the job.

The government on Monday caved in to pressure from the troika and announced 15,000 public sector lay-offs in 2012. Other measures demanded by international creditors include reducing the minimum wage to help boost competitiveness and scrapping the law on collective contracts.

Athens needs to reduce public spending by 1.5 per cent of gross domestic product mainly by cutting spending on defence, health care and social security.

The bailout also depends on separate talks with banks and other private bondholders on a 100-billion-euro Greek debt write-off.

The coalition government is racing to push through the painful reforms to secure a 130-billion-euro (170 billion dollar) bailout deal and avoid a default on bond repayments due in March.