Greek Prime Minister, Lucas Papademos, and the political leaders backing his interim government will try again on Tuesday to agree on the cutbacks needed to win a new bailout deal and avoid Greece defaulting on its debts next month.
Social push-back in Greece has stepped up the domestic political risks for party leaders, as they balance reform demands with the need to retain popular support ahead of new elections later this year. Protesters in central Athens claim that the new programmes will impoverish households and sink the country deeper into recession.
Pressure on Greece has been piling up from its eurozone partners to accept a new round of painful austerity in exchange for a €130 billion ($170.7 billion) loan promised to the country last October. Without that aid, Greece faces a €14.4 billion bond redemption next month that it cannot pay, raising the spectre of a disorderly default by the country.
As a condition for further aid, Greece's official lenders have demanded cross-party support for the reform and austerity programme, to ensure there is no backsliding after a new government takes office later this spring.
Also on Tuesday, Greece successfully sold the planned amount of Treasury bills, with its borrowing costs coming out slightly below the level of the previous auction, as the country's politicians tried to sort out differences and agree on reform measures needed to tie up external aid and avoid a disorderly default in March. Greece's Public Debt Management Agency, or PDMA, sold €812.5 million of 26-week T-bills, including a 30 per cent non-competitive tranche, in line with Greek auction practice. The agency received total bids of €1.701 billion.
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