As Greek Debt Crisis Looms, Leaders 'Face Crucial Decisions' Between More Austerity Or Default

ATHENS, Greece — A crucial meeting between Greece's Prime Minister and debt inspectors on averting default and a possible exit from the euro ended early Thursday with no definite results.

As he left the meeting, Finance Minister Evangelos Venizelos said the main point of contention – cuts in pensions – has not been resolved. He made a dramatic plea to the leaders of the political parties backing Greece's coalition government to reach an agreement before a meeting later Thursday of finance ministers from nations that use the euro.

Venizelos said Greece's "survival over the coming years" depends on the new program of financial aid and the completion of a debt swap agreement with private creditors that would slash Greece's debt load.

"It will determine whether the country remains in the eurozone or whether its place in Europe will be endangered," he said.

"There is no room for any other expediency: we must look Greeks in the eye, look at the national interest and the interest of our children."

Representatives of the so-called 'troika' of Greece's creditors – the European Union, the European Central Bank and the International Monetary Fund – arrived after midnight Wednesday to negotiate with Prime Minister Lucas Papademos, Venizelos and Labor Minister Giorgos Koutroumanis over the main point of contention: the troika's demand for substantial cuts in supplementary pensions.

The issue that has threatened to derail the talks concerns cuts of about euro300 million that must be made so Greece can reach its fiscal targets for 2012. At stake is a euro130 billion bailout that will stave off Greece's bankruptcy.

Venizelos will be leaving for Brussels at 7 a.m. local (0500 GMT). The eurozone finance ministers are scheduled to meet at 1700 GMT.

No time has been yet set for a meeting of Papademos with the three political leaders – socialist George Papandreou, conservative Antonis Samaras and right-wing populist George Karatzaferis. It is the latter two who have raised the most objections over the pension cuts.

On Wednesday, Papademos and the three political leaders had met for seven and a half hours and had accepted all the other demands of the troika, including a 22 percent cut in the minimum wage and firings of civil servants.

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Comments

[Siebenstein]

02:57 AM on 02/09/2012

I think at this point it would be better for Greece to default.
Debt should be forgiven.
Sructured new measures are now already in place.
Give 'em a new chance.

[Joe P]

09:49 PM on 02/08/2012

Greece? What about the US debt? Let’s put 7 million unemployed back to work AND pay off the national debt so our kids can have a decent life and future.......Once you stop laughing, please continue to read further.
Take time to explore HR2990 as a solution to our JOBS, financial, banking AND National Debt crisis. It is in congress now.......and the BIGGEST bankers want you to laugh at it and ignore it, because it will be NO laughing matter for them when once it is passed into law.

HR2990 would incorporate the FED into the Treasury, provide $2.2 Trillion for infrastructure repair over 5 years (creating over 7 million long term JOBS) AND pay off the National Debt as it comes due. We would reclaim the authority of the US Treasury to create OUR money supply in a debt free manner. Why exactly are we paying interest on what should be OUR money supply?

This sounds wildly inconceivable, but after you understand the primary flaw in our current monetary system, it then becomes quite rational. Imagine that we have been ‘driving’ our economy ‘with the brakes on’ since the Federal Reserve act of 1913.

Help this go viral! Go to http://www.causes.com/search?q=HR2990&commit=Search

[sking007]

06:52 PM on 02/08/2012

Just keep cutting until violence erupts. Then at least you know where the baseline for tolerance is. Considering the low productivity of the country, I doubt union strikes would be an indicator.

[GRLev]

07:37 PM on 02/08/2012

This won't work in Greece as labor union thugs, communists and anarchists take to the streets and turn violent frequently, even for the littlest things. Strikes aren't an indicator as they strike again for even the littlest things. Just cut and ignore, the thinking here is they turn violent and strike anyway, just pay attention to the union, communist and anarchist leaders, when they start calling for a revolution or to take up arms, then take action, oh and make sure you have a plan to quickly neutralize the brains in those three groups.

[sking007]

07:41 PM on 02/08/2012

You have a point.

[Siebenstein]

03:00 AM on 02/09/2012

labor union thugs?

I know where you are coming from--the abyss the US is being sucked into.

[LE POST IT]

04:14 PM on 02/08/2012

It's Apocalypse Now in Greece.

[kleingut]

03:23 PM on 02/08/2012

Austerity is an absolute "must" for the Greek public sector. The best thing would be to starve that behemoth to death.

This must be more than compensated by private sector investments.

Not Keynes is the medicine for Greece; anti-Keynes is! Not deficit spending of the public sector is the solution; investment spending of the private sector is!

http://klauskastner.blogspot.com/2012/02/face-truth-greeks-and-foreign-creditors.html

[GRLev]

07:43 PM on 02/08/2012

The great idiot Andreas Papandreou put this social welfare system into place long ago. It looked great on paper, but in reality caused this mess as they had to borrow to sustain the social welfare system. This social welfare system has been in place for decades now, it will be tough to change the thinking of the 750k strong public sector workers, that they have to actually work, not sit in a chair pushing paper at their own leisure in an inefficient backwards government job, with no fear of punishment and guaranteed a job for life.

[Steve Rockett]

02:11 PM on 02/08/2012

Geez do they do anything but meet? Make some decisions and move on.

[Logicalthinker10]

02:56 PM on 02/08/2012

Something that simple is not as easy in this situation.

[demilieu]

02:07 PM on 02/08/2012

After years and years, the average Greek citizen is finally coming to realize...that they may acutally need to WORK for a living.

[GRLev]

07:45 PM on 02/08/2012

The average Greek citizen was working, it was the bloated social welfare induced 750k strong public sector workers who for the most part did nothing without any fear.

[steve2530]

01:42 PM on 02/08/2012

America is 15 TRILLION IN DEBT wake up America if we continue to borrow money we are NEXT WAKE UP AMERICA

[gerald4]

01:55 PM on 02/08/2012

Some US citizens believe that there is no limit to the amount of US Dollars that the US government can take from the US taxpayers and/or also continuously borrow more US Dollars back from wealth producing foreigners in the foreign industrial nations and then spend that money to create all sorts of additional government bureaucratic jobs for the unemployed, more government contracts to construct all sorts of “Pork Barrel” infrastructure projects, and also increase the government benefits for those US citizens whom the politicians think will vote for those same politicians that pass laws to give those citizens more and more "free" government money.

The USA will evolve into a third world nation of mostly unemployed starving beggars similar to Somalia after the US government deficit spending destroys the purchasing power of the US dollar.

US citizens should elect politicians that will work towards RE-INDUSTRIALIZATION of the USA because that will create a bigger economic pie, CREATE MORE (non-government funded) JOBS for US citizens that will create more NATIONAL WEALTH in the USA that more wealth could be CONFISCATED by the US governments at various levels as taxation to pay for our ever increasing government expenses such as more infrastructure, more teachers, more firefighters, etc., and maybe to also PAY OFF SOME OR ALL OF THE US NATIONAL DEBT that we are expecting our children to repay to the bondholders.

[gerald4]

01:56 PM on 02/08/2012

RE-INDUSTRIALIZATION of the USA (or any other nation) would create jobs for US Citizens and an increasing economic pie (GDP) instead of consuming a larger and larger piece of the existing ever shrinking economic pie, and selling or mortgaging our existing NATIONAL WEALTH (borrowing money with privately held assets as collateral) to pay for more and more federal government expenditures that only CONSUMES existing NATIONAL WEALTH that was created by previous generations of US citizens before de-industrialization!

[Steve Rockett]

02:13 PM on 02/08/2012

tax the rich and full employment. Please quit jerking off the nice people.

[fortressfountain]

01:39 PM on 02/08/2012

"Wages of overspending" or a global banking conspiracy to force others into debt to support the executives and ceos of the world.
Why is everyone so concerned and why should any other country have any say so in how Greece runs their country?
I do not think globalization is working too well-lots of social unrest and protesting.
Austerity is a way to force people into debt and high priced insurance, fake shortages, bubbles etc.

[Ed Baker]

12:57 PM on 02/08/2012

It would be good for Greece and good for the world if they were to default. The rates at which they will have to pay to borrow money after such an event would sky rocket, their economy will go into meltdown.

These are the wages of over spending.

It would be very healthy for the rest of the world, especially the rest of the West to see what happens to an economy that borrows too much money.

It would help us all to learn a lesson.

[Steve Rockett]

02:15 PM on 02/08/2012

so kill one child and set an example for the others to follow? You must be a right wing Christian.

[Logicalthinker10]

03:02 PM on 02/08/2012

Regardless of what happens, Greece will default. It is inevitable. There is nothing that you, I, or anyone else can do. Their debt is so far over their heads compared to their production. Their system has to naturally reset. That's reality.

[Ed Baker]

04:48 PM on 02/08/2012

Please link to the post where I advocate killing children.

If you're using this as a metaphor - they've killed themselves.

[anonymous67]

12:20 PM on 02/08/2012

It is time for Greece to throw off the slaver's collar offered by these banks. Follow Argentina -- renounce this bank debt and reclaim your democracy.

[Ed Baker]

12:59 PM on 02/08/2012

I think that's exactly what they should do.

Of course, they will be paying very high rates if they want to borrow in the future, their economy will go into a full scale melt down, and who knows if their democracy can survive such an event....

But it would be very healthy for the rest of the world to see what happens to nations who borrow too much money.

Lending them more at this stage is like trying to cure alcoholism with vodka.

[Ozarks]

11:58 AM on 02/08/2012

I thought the private banks agreed to a 70% "haircut" on Greek debt they hold. Now, this article claims it is back to 50%. It will be a 100% haircut if Greece chooses default and abandons the Euro.

[Ed Baker]

01:00 PM on 02/08/2012

That would be the best thing for everyone. Let those fool enough to lend them money suffer for it. Let the world watch what happens to a nation that borrows too much money.

It will be a good lesson for everyone.

[rdimitrir]

11:57 AM on 02/08/2012

Yet again banksters created an artificial crisis trying to strangle progressive european country into submission.

[Ed Baker]

01:02 PM on 02/08/2012

They borrowed the money - they issued the bonds themselves. They not only borrowed it, but set their own terms for repayment.

Their creditors were simply stupid to lend them money at these ridiculously low rates. Let the creditors lose for being so foolish.

Let the world watch an economy implode from too much debt. It would be healthy for the world if they default.

[gerald4]

01:37 PM on 02/08/2012

Excellent logic

[WI Patriot]

10:59 AM on 02/08/2012

The final phase of the welfare state - since its all about recieving handouts from the State - everyone uses their family's position in government to get more and more money, those without govt connections strike and protest for more and more money until there is nothing left but an empty, corrupted shell of a nation.

Sad.

[gerald4]

10:34 AM on 02/08/2012

Non-productive de-industrialized countries like Greece should be allowed to go bankrupt when they cannot repay the money that they borrowed and spent on themselves, just like some US families go bankrupt when they cannot pay their credit card expenses.

Greece borrowed money to provide their population with all sorts of government paid free services, government payroll union (highly paid) jobs, increased and extended employment payments, pork barrel projects, and then paid for all of these government expenses and benefits with "borrowed" funds to “buy” re-election votes?

When the Greek government goes bankrupt, the Greeks will no longer get these free government benefits, and then the Greeks will have to re-industrialize and start working again to create more privately owned NATIONAL WEALTH that can be taxed to pay for their Greek government activities, and this will help that nation become respected again.

The Greeks also de-industrialized, stopped working to make the things that they consumed, stopped generating any new national wealth that would be subjected to taxation, traded for their imported goods, and etc.

The Greeks then decided to start deficit spending to mimic the US financial operations of just borrowing money instead of creating and new wealth because that economic model appeared to be very successful to the Greek population.

[Ed Baker]

01:04 PM on 02/08/2012

It would be a great service to the world for us to watch them implode. We should see the real effects of what happens to a country that borrows too much money.

Let them default - let their creditors lose for being so foolish as to lend them money. Let the Greeks pay sky high rates on the next pile of money they want to borrow.