Greece says faces 24-hour deadline to clinch rescue

Sat Feb 4, 2012 3:42pm EST
 
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By George Georgiopoulos and Renee Maltezou

ATHENS (Reuters) - Greece has just one day left to strike a deal with impatient lenders and reluctant political party leaders on a 130 billion rescue plan before the country is pushed towards a chaotic default, its finance minister warned on Saturday.

Athens has wrangled without success for weeks with lenders and private bondholders on the bailout package and a bond swap plan, putting itself dangerously close to bankruptcy as 14.5 billion euros of debt falls due in mid-March.

The talks have been held up largely on concern that the rescue plan may not be enough to bring Greece's debt back to a sustainable level, and fears that Athens lacks the will or ability to ram through reforms demanded in exchange for aid.

In an apparent warning to Greek political leaders opposing key reforms, Finance Minister Evangelos Venizelos said the patience of European partners and the International Monetary Fund footing the bill for Greece's bailout was wearing thin.

"There is great impatience and great pressure not only from the three institutions that make up the troika but also from euro zone member states," Venizelos said after what he called a "very difficult" conference call with euro zone counterparts.

"The moment is very crucial. Everything should be concluded by tomorrow night. We are on a knife-edge," he told reporters.

Athens had made progress by agreeing a plan to recapitalize Greek banks and details on privatization, he said. A senior banker told Reuters the recapitalization would occur mainly via common shares with restricted voting rights.

But far bigger sticking points on wages and spending cuts remain unresolved, and Venizelos warned that the stakes were rising as time ran out. "The distance between the successful completion of the procedures and an impasse which could happen by accident or because of a misunderstanding is very small."   Continued...

 
<p>An anti-government protester holds a Greek flag as he shouts slogans against Greek Premier George Papandreou and his lawmakers in front of the parliament during a debate prior to a vote of confidence in Athens November 3, 2011. REUTERS/Yannis Behrakis</p>