A dispute over pension cuts stalled talks last night between leaders of Greece's fractious national unity government on tough new austerity measures, one of the last hurdles to be cleared before eurozone officials can sign off on a €130 billion bailout and save Athens from the default.
A statement by Lucas Papademos, the technocrat prime minister, said there was “broad agreement on all the issues except for one which demands further elaboration”. The talks between Mr Papademos and the heads of the three Greek political parties in his cabinet included €3 billion in new spending cuts .
After seven hours, Mr Papademos called in the troika – mission chiefs from the European Commission, European Central Bank and International Monetary Fund who drafted the new medium-term fiscal programme with the Greek finance ministry – to help break the deadlock. Greece still needs to find about €300 million of savings to close a €3 billion programme of spending cuts to keep this year’s budget on track. Mr Papademos earlier held separate telephone consultations with Christine Lagarde, IMF managing director, Olli Rehn, the EU monetary commissioner, and Jean-Claude Juncker, chairman of the eurozone finance ministers who are due to discuss the Greek programme this evening.
Antonis Samaras, the conservative leader, had raised objections to cuts in supplementary state pensions, while former premier, George Papandreou, refused to discuss the alternative of cutting primary pensions. The pensions issue is seen as critical as elderly, low-income Greeks have been hit hardest by the deeper than expected recession.
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