Wednesday, February 1, 2012

Greece strives to avoid messy default

Greek Finance Minister Evangelos Venizelos (L) and Greek Prime Minister Lucas Papademos arrive for a joint press conference following a European Union summit at the EU headquarters on January 30, 2012 in Brussels.

Source: Press TV

The Greek government is frantically looking for the support of all its political leaders in order to implement more stringent austerity measures needed to avoid a disastrous default.

On Wednesday, the government spokesman said Prime Minister Lucas Papademos would meet the conservative, socialist and far-right leaders in a few days to ask them to back his government so it can clinch a deal with international creditors.

"The meeting of the political leaders is crucial," Pantelis Kapsis stated.

The International Monetary Fund (IMF) has warned that the austerity measures are necessary to secure the new bailout package that Athens needs to escape the default.

Later in the day, Athens and IMF officials said negotiations for landmark debt deals would be concluded within days.

Greece is in talks with private creditors to have them take losses on their bondholdings and with its international bailout rescuers to secure new loans.

A deal with private sector creditors to cut Greece's debts by 100 billion euros has almost been concluded, and the government is now racing to complete talks on the 130-billion-euro ($170.18 billion) bailout by the end of the week.

To achieve the bailout package, Athens must first convince the European Union and the IMF that the government will implement long-delayed reforms and make further spending cuts.

Greece's current debts stand at 340 billion euros ($440 billion) -- a sum, which equals around 31,000-euro debt per person in the country of 11 million people. The country has the highest debt burden in proportion to the size of its economy in the entire 17-nation eurozone.

Investors fear a default could mess with the international financial equation and send the global economy into recession.

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