Lucas Papademos, the Greek premier, failed to make party leaders accept harsh terms in return for a second €130 billion bailout, pushing Athens closer to a disorderly default as early as next month.
After five hours of discussions, the three leaders of Greece‘s national unity government had not accepted demands by international lenders for immediate deep spending cuts and labour market reforms as part of a new medium-term package.
Mr Papademos said the political leaders had agreed on some “basic issues”, including making spending cuts this year of 1.5 percentage points of GDP, or about €3 billion, according to a statement from his office.
George Karatzaferis, the head of the small rightwing Laos (People’s) party said as he left the prime minister’s office that he expected the talks to continue on Monday. There was no immediate announcement by Mr Papademos.
It was clear however that the talks had reached a dangerous deadlock. “They’re asking for more recession than the country can take”, said Antonis Samaras, leader of the centre-right New Democracy party as he left the meeting.
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