Greek debt talks end without full deal

Feb 9, 2012, 7:56 GMT

Athens - Greece failed to finalize the terms for a second bailout on Thursday after some party leaders in the coalition government refused to agree to international creditors' demands for additional cuts to state and private pensions.

Finance Minister Evangelos Venizelos headed to Brussels hoping to salvage the deal and avert bankruptcy, as he meets with eurozone finance ministers later Thursday.

'The country's survival over the coming years depends on a bailout,' said Venizelos, before leaving the country.

'It will determine whether the country remains in the eurozone or whether its place in Europe will be in danger,' he said. 'We must look at the national interest and the interest of our children.'

A statement issued by the prime minister's office said the three party leaders appeared to agree on all the creditors' demands, except to make 300 million euros (398 million dollars) in cuts to state and private pensions, following an eight-hour overnight discussions.

Athens needs the second 130-billion-euro (172-billion-dollar) bailout to avoid a default on bond repayments due in March.

The three leaders backed major new austerity measures that include a 22-per-cent cut in minimum wage and firings of civil servants.

Athens has already accepted demands that the private sector minimum wage be reduced by 22 per cent, from 751 euros (995 dollars) to 590 euros, and by 32 per cent for those under 25 years.

The government also agreed to freeze all salary raises until the unemployment rate is reduced to 10 per cent, from the current 19 per cent.

Pension cuts of up to 15 per cent will be carried out for many public sector companies, while the government will be forced to lay off 150,000 public sector workers by 2015.