Greek rescue package of €130bn delayed by politicians; markets nervous

Greece ‘s intententions on taking make-or-break talks over a €130bn (£108bn) rescue programme for the debt-choked country had been strong until tonight as officials announced a deal on the Greek rescue package would be delayed

Sarkozy and Merkel step up the pressure on Greece rescue package

Sarkozy and Merkel step up the pressure on Greece rescue package

Greece ‘s intententions on taking the €130bn (£108bn) rescue package for the debt-choked country had been strong until tonight as officials announced a deal on the Greek rescue package would be delayed.

Confusing all market expectation and European hopes, the Greek government said agreement over the conditions attached to further aid could not be reached as a meeting between political chiefs and the Greek prime minister, Lucas Papademos, had been deferred until today.

The prevailing mood in the markets is that Greece will get a debt-reduction deal with its private creditors as well as the second bailout, even though another round of deadlines have passed.

Sarkozy and Merkel step up the pressure on Greece rescue package

President Nicolas Sarkozy of France and German Chancellor Angela Merkel have warned Greek leaders that they need to push through the austerity measures or risk letting Greece go bankrupt. German Chancellor Angela Merkel and French President Nicolas Sarkozy have stepped up the pressure on Greece to accept the painful terms of a new EU and IMF forged deal of $171 billion rescue package, stating there would be no further bailout unless all Greek political parties endorse the deal.

Unable to conceal her own exasperation, the German chancellor, Angela Merkel, said: “I honestly can’t understand how additional days will help. “Time is of the essence. A lot is at stake for the entire eurozone,” she said after holding debt crisis talks in Paris with the French president, Nicolas Sarkozy.

Acutely aware of the uproar that further austerity is bound to ignite among a populace that has endured unprecedented belt-tightening but seen little in return as Athens repeatedly misses fiscal targets, Greece’s political class has worked furiously to disassociate itself from reforms increasingly seen as counter-productive.

Markets Nervous as Greek Crisis Talks Continue

In Europe, the FTSE 100 index of leading British shares was down 0.2 percent at 5,878 while Germany’s DAX fell 0.5 percent to 6,731. The CAC-40 in France was 0.3 percent lower at 3,395.

Wall Street was also poised for a subdued opening, with Dow futures and the broader S&P 500 futures broadly unchanged at 12,773 and 1,338.

The euro was little changed against the dollar at $1.3130 while oil prices were a tad lower — the benchmark New York rate was 25 cents down at $96.66 a barrel.

Greek Rescue Package : Timeline of how the deal got delayed

“All parties have basically accepted the deal,” said a well-briefed source, referring to the three elements in Papademos’s national unity coalition. “But it is felt that the details have to be fine-tuned. The leaders want to know what they are signing up to.”

Hours later, the prime minister’s office announced that the meeting would take place in the “late afternoon”. Rumours swirled that a deal was near, with headway made on the highly contentious issues of wage cuts in the private sector. In anticipation, the Athens stock market rallied.

By mid-afternoon, however, the meeting had been cancelled with officials saying Papademos would instead hold talks with visiting inspectors from the European Union, European Central Bank and International Monetary Fund, the “troika” propping up the insolvent Greek economy.

The postponement confirmed that ahead of general elections in April the high-stake talks have also been turned into a high-stakes game of brinkmanship.

The heads of the three political parties in Greece’s national unity government have delayed a planned meeting to agree reforms until Tuesday, the prime minister’s office stated, the Financial Times reports.

A government official said more last-minute details needed to be worked out on the text of the 50-page medium-term fiscal program that the three conservative, socialist and far-right leaders must approve.

Speaking in Paris on Monday, Merkel highlighted the exasperation among European leaders at the meandering negotiations and endless arguing in Athens, which have yet to produce agreement and acceptance of the austerity and reform measures demanded by lenders before Greece can receive further emergency funds.

“I honestly can’t understand how additional days will help. Time is of the essence. A lot is at stake for the entire euro zone,” she said, at a press conference with Sarkozy, Reuters reported.

For his part, the French president urged Greece’s political leaders to agree to the reforms, stating that the crisis had to be resolved “once and for all.”

“Europe is a place where everyone has their rights and duties. Time is running out, it needs to be concluded, it needs to be signed,” he said, according to the BBC.

Greece PM : Will he succeed in preventing Greece from bankruptcy

Greece’s technocrat Prime Minister Lucas Papademos is scrambling to avert a chaotic Greek default on $19 billion worth of loan repayments due to private lenders on March 20.

He needs party leaders’ backing for tough IMF and EU reforms demanded in exchange for a bailout, but with elections potentially set to take place in April his coalition partners are loathe to associate themselves too closely with austerity measures that will lower struggling Greeks’ standard of living.

With Greece staring at the spectre of bankruptcy – barely six weeks before it has to make bond repayments worth €14.5bn – EU officials expressed disbelief that politicians could not finally put their name to an accord.

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