Deal to bail out Greece

Euro zone finance ministers to confer by telephone on Saturday after 12 hours of talks in Athens
failed to produce a breakthrough on a deal to bail out Greece. Greek finance minister said.

Greek state-employed mechanics protest against salary cuts and layoffs as talks on a bailout continue.

Evangelos Venizelos added that a planned meeting by euro zone ministers on Greece originally scheduled for Monday would now be held on Wednesday. He said he would take part in the telephone conference scheduled for 1230 GMT to discuss details of a rescue deal for Greece worth 130 billion euros (US$171 billion) which officials have been trying to seal since October.

"Critical issues pertaining to the country's future remained open" after 12 hours of "tough" negotiations Friday with the European Union, International Monetary Fund and European Central Bank, he said. Trio organisations, which rescued Greece in 2010 with an earlier loan, are demanding further labour cost cuts which Greek unions are refusing to concede amid fears that they could worsen an already deep recession.

Venizelos will brief fellow cabinet ministers before another meeting with senior auditor  from the EU, IMF and ECB, known locally as the 'troika', a finance ministry source said on Saturday. The political coalition backing Greece's interim government is strongly opposed to the troika's demands for further civil servant cuts and to a reduction in the minimum wage, currently at 750 euros a month.

Prime Minister Lucas Papademos has reportedly threatened to resign if his coalition backers reject the demanded austerity measures.The government spokesman on Friday declined to comment on the reports.
"I do not want to make such assumptions," spokesman Pantelis Kapsis told Real FM radio. "I think the political leaders and the prime minister will jointly take the decisions on how we will proceed from now on."
Representatives of private holders of Greek debt are also returning to Athens this weekend for more negotiations on a crucial writedown Greece needs to avoid sovereign default.


Greece sutained negotiating for months to obtain debt relief under the so-called Private Sector Initiative as a condition for receiving a second international bailout from the EU and the IMF, agreed in October.

Eurozone governments and banks have both been playing hardball for weeks in their bid to reduce by at least half the 200 billion euros in privately held Greek debt. The country's overall debt stands at 350 billion euros.

Papademos said in a statement Friday that Greece had nearly completed negotiations on the eurozone bailout which depends on the debt writedown."We are in the final phase of a very critical procedure to form Greece's new economic programme and complete a loan deal that will lighten the load of the public debt and ensure the country's financing for many years to come," he said.

Pressure is mounting for Greece to strike a deal with private creditors.The finance minister this week said an official offer to creditors must be made by Feb 15.Athens faces debt repayments of 14.4 billion euros ($19 billion) on March 20