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Talks between lenders and Greek leaders had dragged without reaching an agreement. Lucas Papademos, the Greek prime minister, had insisted on revising budget targets for 2014.
The demand, which would have Athens reaching a primary budget surplus of 4.5 per cent by 2014, has forced officials in the so-called troika – the International Monetary Fund, European Commission, and European Central Bank – to revise their debt sustainability analysis. The troika debt analysis is the central document needed to determine how big the new bailout for Greece must be. A second aid programme cannot be agreed by finance ministers without it.
During the talks, the Greek government agreed to cut €300 million from pensions in 2012 and €325 million in 2013. But it balked at making €325 million in additional pension cuts this year, forcing the need to find cuts elsewhere.
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