Newspaper article The Evening Standard (London, England)

Merkel's Warning on Rescue to Feuding Greek Politicians

Newspaper article The Evening Standard (London, England)

Merkel's Warning on Rescue to Feuding Greek Politicians

Article excerpt

Byline: Russell Lynch

GREECE'S [euro]130 billion ([pounds sterling]108 billion) bailout hung in the balance today, as German Chancellor Angela Merkel warned the debt-laden nation's feuding politicians to get behind even deeper spending cuts.

The leaders of Greece's three major political parties failed to hit a midday deadline to sign up for a fresh round of cuts demanded by the so-called "troika" of the European Union, International Monetary Fund and European Central Bank in return for the funds to stave off a catastrophic default.

In signs of fraying patience Merkel -- speaking at a joint press conference in Paris with French President Nicolas Sarkozy -- said it was time for Greece to "assume responsibilities". She warned: "There can be no deal if the troika proposals are not implemented. They are on the table, time is of the essence. Something needs to happen quickly."

Greek prime minister Lucas Papademos took over last November with the backing of socialist party PASOK, the conservative New Democracy and farright LAOS to steer through austerity measures ahead of fresh elections, possibly as soon as April.

Political leaders have reached an outline agreement on cutting Greece's bloated public sector by 1.5% of GDP -- around [euro]3 billion -- but rows over cuts to Greece's minimum wage still raged as the troika's deadline passed.

Despite Greece's financially parlous state, politicians are jockeying for position ahead of elections and reluctant to sign up for yet more pain as the nation faces a fifth-successive year of recession.

Antonis Samaras' New Democracy -- which is ahead in the polls -- is looking for snap elections in April, although PASOK's George Papandreou, who stepped down as prime minister in November, wants to give Papademos more time to push through reforms. Greece's two biggest unions added to the pressure with major protests planned for tomorrow.

Greece's leaders were warned over the weekend no more cash would be forthcoming without structural reforms, which would leave the beleaguered nation facing a disorderly default on March 20, when a [euro]14. …

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