Greek crisis deepens as austerity talks falter

The Telegraph ^ | 2/8/2012 | Louise Armitstead

[bruinbirdman]

Greek prime minister Lucas Papademos was struggling to maintain international credibility on Tuesday night, after missing a third deadline in a week to deliver an austerity agreement needed to release a €130bn (£108bn) bail-out package for his country and avert a debt default.

However, international patience with Greece is fast running out.

This situation was exacerbated by the decision to postpone by one day a meeting due to start on Tuesday night, for the country's political leaders to approve a "final draft document" on austerity measures.

Although a raft of measures have been agreed, members of the three main parties had been scheduled to try to find another €1.3bn of cuts.

They will now meet on Wednesday night. Eurozone finance ministers have scheduled a meeting for Thursday to review the budgetary plans so the Greek parliament can vote on the measures at the weekend.

Greece needs international aid to avoid defaulting on a €14.5bn bond on March 20, but will not receive help without a deal.

But as Athens was once again plunged into chaos by strikes and violent demonstrations, some leaders argued that Europe should cut its losses with Greece.

Neelie Kroes, the Dutch vice-president of the European Commission (EC), told the Volkskrant newspaper: "It is absolutely not a case of man overboard if someone leaves the eurozone."

However, Jose Manuel Barroso, president of the EC and co-president of the EU, appealed for continued international support for Greece.

"The costs of a default of Greece, the costs of a possible exit of Greece from euro, would be much higher than the costs of continuing to support Greece," he said. "This is very important. Of course, it also means Greece undertakes clearly, unambiguously, to make the necessary adjustment efforts."

He was backed by Jean-Claude Juncker, chairman of the Eurogroup. "If

[LibLieSlayer]

Domino number one is leaning.

LLS