Greece still to convince Europe over rescue deal

Mon Feb 13, 2012 6:25pm EST
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By Renee Maltezou and Robin Emmott

ATHENS/BRUSSELS (Reuters) - Europe gave Greece until Wednesday to convince skeptical international creditors that it would stick to the punishing terms of a multi-billion-euro rescue package, endorsed by parliament as rioters torched downtown Athens.

Lawmakers backed drastic cuts in wages, pensions and jobs on Sunday as the price of a 130 billion euro ($170 billion) bailout by the European Union and International Monetary Fund to avert a messy default that would send shockwaves through the euro zone.

Scenes of running battles between police and rioters and flames engulfing cinemas, shops and banks underscored a sense of deepening turmoil in the country after more than four years of recession and two of punishing austerity.

The EU warned on Monday that the consequences of failure would be "devastating."

It gave the fragile ruling coalition of Prime Minister Lucas Papademos until Wednesday, when euro zone finance ministers are expected to meet, to specify how 325 million euros of the 3.3 billion euros demanded in budget savings will be achieved.

By the same deadline, Greek political leaders must give a written commitment to implement the terms of the deal, a Greek government spokesman said, reflecting fatigue among EU leaders who say they have heard enough broken promises.

The spokesman said Greece would hold an election in April, when deep public anger over the second round of austerity could drive voters further to the left and right and test Greece's commitment to the programme.

Euro zone paymaster Germany said ahead of the vote that it was losing patience with throwing money into the "bottomless pit" of Greece's debt crisis. Official reaction from Berlin on Monday was muted.   Continued...

<p>A petrol bomb explodes at riot police during a huge anti-austerity demonstration in Athens' Syntagma (Constitution) square February 12, 2012. February 12, 2012. REUTERS/Yannis Behrakis</p>